DEF 14A of Dynex Capital Inc
Filed Apr 8, 2025 · FY20240000826675-25-000050
DIRECTOR NOMINEES
DIRECTOR NOMINEES Pursuant to Virginia law and our Restated Articles of Incorporation, effective May 14, 2021, as amended by the Articles of Amendment of the Restated Articles of Incorporation, effective May 18, 2023 (as amended, the “Articles of Incorporation”), directors of the Company are to be elected by the holders of shares of common stock at the Annual Meeting to serve until the next annual meeting and until their successors are elected and duly qualified. On May 29, 2024, the Board appointed Marie Chandoha to the Board. Ms. Chandoha was recommended by executive officers of Dynex. On the recommendation of the Nominating & Corporate Governance Committee (the “Nominating Committee”), the Board nominated Byron L. Boston, Marie Chandoha, Julia L. Coronado, Alexander I. Crawford, Andrew I. Gray, Joy D. Palmer, and Smriti L. Popenoe for election by the holders of shares of common stock to the Board at the Annual Meeting. Unless otherwise indicated, a proxy will be voted FOR the election of Messrs. Boston, Crawford, and Gray, Dr. Coronado, and Mses. Chandoha, Palmer, and Popenoe to the Board. Each director nominee has agreed to serve if elected. Selected biographical information regarding each director nominee is set forth below. Although it is anticipated that each director nominee will be able to serve, should any nominee become unavailable to serve, the shares represented by each proxy may be voted for another person or persons designated by the Board. In no event will a proxy be voted for more than seven directors.
BOARD COMPOSITION
BOARD COMPOSITION The following information sets forth the names, ages, principal occupations, and business experience for the Company’s director nominees as of the date of this Proxy Statement. In addition to the information presented below regarding each director nominee’s specific experience, qualifications, attributes and skills that led our Board to the conclusion that he or she should serve as a director, we also believe that all of our director nominees are aligned with our purpose of making lives better through careful stewardship of individuals' savings, providing financing and strengthening the communities we serve. Further, we believe our director nominees live our core values of delivering value, building trust, being curious and being kind. They each have demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to the Company and our Board. Finally, we value their significant experience on other boards and board committees. Unless otherwise indicated, the business experience and principal occupations shown for each director has extended five or more years.
BOARD COMPOSITION
| NOMINEE | AGE | INDEPENDENT | TENURE | | Byron L. Boston | 66 | | 13 years | | Marie Chandoha | 63 | ● | 10 months | | Julia L. Coronado | 56 | ● | 4 years | | Alexander I. Crawford | 58 | ● | 1 year | | Andrew I. Gray | 59 | ● | 1 year | | Joy D. Palmer | 67 | ● | 4 years | | Smriti L. Popenoe | 56 | | 2 years |
BOARD COMPOSITION
| 6 | 2025 PROXY STATEMENT | DYNEX CAPITAL, INC. |
DIRECTOR SKILLS AND QUALIFICATIONS
DIRECTOR SKILLS AND QUALIFICATIONS The Board believes that its directors collectively have the level and balance of skills, experience, core values, and character to execute the Board’s responsibilities. The table below reflects some of the key skills that our Board has identified as particularly valuable to the effective oversight of the Company and the execution of our corporate strategy, along with the number of directors that have these skills. This director skills matrix is not intended to be an exhaustive list of each of our director’s skills or contributions to our Board. All of our directors also exhibit high integrity, an appreciation for diversity of background and thought, innovative thinking, a proven record of success, and deep knowledge of corporate governance requirements and best practices. Additional information on each director, including some of their specific experience, qualifications, attributes and skills, is set forth below. Indicates a relevant skill, knowledge and/or experience identified by that director.
DIRECTOR SKILLS AND QUALIFICATIONS
| | Boston | Chandoha | Coronado | Crawford | Gray | Palmer | Popenoe | | Senior Leadership | | | | | | | | | Financial Services Industry | | | | | | | | | M&A | | | | | | | | | Capital Markets | | | | | | | | | Business Operations | | | | | | | | | Cybersecurity and Technology | | | | | | | | | Risk Management | | | | | | | | | Government Policy and Regulatory | | | | | | | | | Accounting/Audit | | | | | | | | | Mortgage Industry | | | | | | | | | Investment Management | | | | | | | | | Corporate Governance | | | | | | | | | Public Company Experience | | | | | | | | | Business Development and Strategy | | | | | | | | | Social Responsibility/ Resilience | | | | | | | | | Artificial Intelligence | | | | | | | | | Finance | | | | | | | | | Independent Audit Committee Financial Expert | | | | | | | | | Human Capital Management | | | | | | | | | Executive Compensation | | | | | | | |
DIRECTOR SKILLS AND QUALIFICATIONS
| DYNEX CAPITAL, INC. | 2025 PROXY STATEMENT | 7 |
DIRECTOR SKILLS AND QUALIFICATIONS
| DIRECTOR NOMINEE BIOGRAPHIES | | | | | BYRON L. BOSTON | Chairman of the Board and Co-Chief Executive Officer | | | Byron L. Boston joined the Board in 2012 and was appointed to the role of Chairman in December 2023. Byron has served as our Co-Chief Executive Officer since July 2024, and previously served as Chief Executive Officer from January 2014 to June 2024, as President from March 2012 to December 2020, and as Chief/Co-Chief Investment Officer from April 2008 until December 2023. Byron leads the strategic operations that have resulted in long term net gains and significant economic return for investors. Business Leadership: Byron brings over 40 years of leadership experience and has an extensive background in U.S. real estate finance, asset management/investment banking, and fixed-income capital markets. Byron was successful in building Sunset Financial Resources, a mortgage REIT specializing in high-quality residential and commercial loans and securities, and instrumental in growing Dynex's business after he joined the Company in 2008. Byron leverages this extensive experience and deep understanding of Dynex’s growth and strategy to guide the Company’s business operations and disciplined investment approach. As Co-CEO and Chairman of Dynex’s Board of Directors, he also helps drive continued collaboration between the Company’s executive leadership team and Board. Mortgage-Backed Security Experience: Over the course of his career, Byron has gained significant experience in the debt and equity capital markets. During his six years at Freddie Mac, he developed and led the initial investment plan to grow the company’s retained portfolio. Previously, Byron spent over a decade at Credit Suisse First Boston as a fixed income bond trader specializing in mortgage backed securities and over two years at Lehman Brothers as a mortgage-backed securities bond trader. Background: Byron currently serves on multiple boards in advisory and leadership capacities including the National Association of Real Estate Investment Trusts (“NAREIT”) on the Advisory Board of Governors and as Chair of mREIT Council, representing the industry on a national level, and previously served on the board of the Mortgage Bankers Association. He also serves on the board of the Salzburg Global Seminar where he has served as the Chair of the Investment Committee and the Chair of the Finance Committee. He received an A.B. in Economics and Government from Dartmouth College and a MBA with emphasis in Accounting and Finance from the University of Chicago Booth School of Business, where he was also a member of the Director’s Consortium. | | | Age: 66 Director Since: 2012 Chairman Since: 2023 Committee: Investment (Chair) Key Skills: •Senior Leadership & Business Operations •Financial Services Industry •Capital Markets •Mortgage Industry •Investment Management •Corporate Governance Other Current Boards: NAREIT Advisory Board of Governors, Salzburg Global Seminar | | |
DIRECTOR SKILLS AND QUALIFICATIONS
| 8 | 2025 PROXY STATEMENT | DYNEX CAPITAL, INC. |
DIRECTOR SKILLS AND QUALIFICATIONS
| | Marie Chandoha | | | Marie Chandoha joined the Board in June 2024. Business Leadership: Marie brings 40 years of financial services leadership experience as a former Chief Executive Officer and senior executive in the financial services industry, in addition to currently serving on public company boards. She has a track record of transforming previously underperforming businesses, scaling them and creating value. Most recently, Marie spent nearly a decade as the President and CEO of Charles Schwab Investment Management from 2010 to 2019, where she played an essential role in evolving the business into an innovative and winning competitor. During her tenure, she doubled the business's assets under management to $400 billion, which made it one of the top asset gatherers in the industry. Financial Services and Technology: Beyond Charles Schwab Investment Management, Marie’s career in financial services has spanned executive roles at major global financial institutions. As Managing Director and Global Head of Fixed Income Business at BlackRock, Marie drove innovation in the ETF market and led a global $440 billion investment management business. In addition, Marie was the Co-Head and Senior Portfolio Manager of Montgomery Fixed Income at Wells Fargo Asset Management for over eight years, where she grew and scaled the business from $1 billion to $16 billion in assets under management. At Wells Fargo, she focused on managing bond portfolios, primarily for institutional investors. Her core competencies include finance, investment management, strategy, regulatory dynamics and risk management, among others. Governance: Marie serves on the boards of Macy's, Inc. on the Audit and Finance committees, and State Street Corporation on the Audit, Executive, Risk and Technology and Operations committees. Background: She received a B.A. degree in economics from Harvard University. | | Age: 64 Director Since: 2024 Committee: •Nominating & Corporate Governance (Chair) •Audit •Investment Key Skills: •Senior Leadership & Business Operations •Financial Services Industry •Corporate Governance •Technology •Audit Committee Financial Expert Other Current Boards: Macy's, Inc. (NYSE:M), State Street Corporation (NYSE:STT) | |
DIRECTOR SKILLS AND QUALIFICATIONS
| DYNEX CAPITAL, INC. | 2025 PROXY STATEMENT | 9 |
DIRECTOR SKILLS AND QUALIFICATIONS
| | JULIA L. CORONADO, Ph.D. | Lead Independent Director of the Board | | | Julia L. Coronado, Ph.D. joined the Board in October 2020 and was appointed as Lead Independent Director in December 2023. Financial Experience: Since 2017, Julia has served as the President and Founder of MacroPolicy Perspectives, LLC (MPP) a research advisory firm with deep expertise in macroeconomics, regulatory policy, financial and global markets that helps inform client decisions in financial services and other industries. Since 2018, she has served as Clinical Associate Professor of Finance at the University of Texas at Austin. From 2014 to 2017, Julia was the Chief Economist at Graham Capital Management where she managed a global economic forecast, advised portfolio managers, and participated in risk and investment committees. Additionally, she spent 10 years in the banking industry, first as a Senior US Economist at BNP Paribas and then at Barclays as Senior US Economist. Julia also served as a staff economist for the Federal Reserve Board of Governors in Washington, D.C. and contributed to the Federal Open Market Committee forecasts from 1997 to 2006. Financial Advisory Experience: Julia brings over 30 years of experience in international and domestic market economics, fiscal and monetary policy, and global economic forecasting. She is a regular commentator in financial media, (including CNBC, Bloomberg, Marketplace, and the Wall Street Journal). Julia has also represented the U.S. at the Organization for Economic Cooperation & Development and testified before Congress on Social Security reform and digital currency developments. Her experience across these areas, as well as her service on other public company and advisory boards, allows her to provide significant insight to help guide the Company’s business strategy and enable it to thrive in a complex macroeconomic environment. Background: Julia is an independent director on the board of Robert Half, an international staffing and consulting firm, where she serves on the nominating & governance committee. Julia is a member of the Economic Studies Council at the Brookings Institution and member of the Advisory Boards of the Bureau of Economic Analysis, the Pension Research Council at the Wharton School, and the Cleveland Federal Reserve Center for Inflation Research. She received a B.A. in Economics from the University of Illinois and a Ph.D. in Economics from the University of Texas at Austin. | | | Age: 56 Director Since: 2020 Committees: •Compensation (Chair) •Nominating & Corporate Governance •Investment Key Skills: • Senior Leadership & Business Operations • Financial Services Industry • Capital Markets • Government Policy and Regulatory • Academia Other Current Public Boards: Robert Half (NYSE:RHI) | | |
DIRECTOR SKILLS AND QUALIFICATIONS
| 10 | 2025 PROXY STATEMENT | DYNEX CAPITAL, INC. |
DIRECTOR SKILLS AND QUALIFICATIONS
| | ALEXANDER I. CRAWFORD | | | Alexander I. Crawford joined the board in March 2024. Business Leadership, Financial Services, and Technology Experience: Alexander brings extensive financial knowledge and expertise across the broad financial ecosystem, including global multi-asset risk management, public and private equity, credit, and tail-risk hedging. He is also recognized as a thought leader in the risk management of artificial intelligence ("AI"). As the founder, Chairman, and CEO of Artificial Intelligence Risk, Inc. since 2023, Alexander created a governance, risk, compliance, and cybersecurity platform for corporate AI and developed incisive data-driven analytics and quantitative tools to analyze and mitigate risks through innovative strategies. He also serves as an advisory board member of Economic, Inc., a data intelligence company that measures corporate environmental, health, and safety performance. Alexander is a thought leader on making AI effective, safe, and ethical and has written extensively on the topic. His background and expertise will help strengthen Dynex’s technology capabilities and position in an evolving financial services industry. Additional Professional Experience: Alexander also brings to our Board extensive experience and expertise in risk management and compliance. He served in a number of senior risk management roles, including most recently as Partner and Chief Investment Risk Officer at Lord, Abbett & Co. LLC ("Lord Abbett") from 2012 to 2022, and is now a Limited Partner there. As the Chief Investment Risk Officer, Alexander engaged with global regulators on various topics. He is well-respected by his peers and regulators and sat on numerous industry working groups during his tenure, such as leading the LIBOR transition effort at Lord Abbett. He was responsible for writing detailed regulatory policies and procedures for the U.S. and Europe and continues to engage globally on complying with existing and creating new policies regarding AI with governments, regulators, companies, and NGOs. In addition, Alexander was a charter member of Lord Abbett's ESG committee and has written extensively on the intersection of sustainability, ESG, and AI. He is the lead author of a forthcoming white paper using a data-driven approach that focuses on broadening sustainability to look at important sustainability metrics beyond simply greenhouse gases. Background: Alexander earned a B.S. in Computer Science from Harvard University. He has been a senior executive at major financial institutions, including Goldman Sachs, Morgan Stanley, Deutsche Bank, and RBS, for over 10 years. He has focused extensively on MBS throughout his career, and his MBS research has appeared in numerous publications. His 35-year career will offer significant insights for the Company’s business and make him a valuable member of the Board. | | Age: 58 Director Since: March 2024 Committees: •Audit •Compensation •Investment Key Skills: •Financial Services Industry •Risk Management •Government Policy and Regulatory •Artificial Intelligence and Technology •Investment Management •Audit Committee Financial Expert | |
DIRECTOR SKILLS AND QUALIFICATIONS
| DYNEX CAPITAL, INC. | 2025 PROXY STATEMENT | 11 |
DIRECTOR SKILLS AND QUALIFICATIONS
| | ANDREW I. GRAY | | | Andrew I. Gray joined the board in March 2024. Andrew is currently an Executive Advisor at MyNextSeason and has served on the Board of Trustees of the Global Association of Risk Professionals (GARP) since March 2017. Andrew has over 30 years of leadership experience across the financial services industry, including profit and loss management, strategy, finance, risk, and technology. He has a strong track record in guiding leadership teams and advising boards on business growth, operational improvement and risk, and regulatory compliance. Risk Professional Experience: Most recently, Andrew served as the Group Chief Risk Officer ("CRO") and Management Committee member for The Depository Trust and Clearing Corporation (the “DTCC”) from February 2015 to September 2022. Over his tenure he transformed the global risk function and drove significant improvements in market, liquidity, credit, and non-financial risk capabilities, including cybersecurity, business continuity, data management, and operational risk. With his extensive background in the financial services and risk management industries, he plays a crucial role in helping guide Dynex’s operational and growth strategy. Business Leadership Experience: Prior to his CRO role, Andrew led DTCC’s core businesses, including Clearance and Settlement of Equities and Fixed Income products, Asset Services, Wealth Management Services, Insurance & Retirement Services, Institutional Trade Processing and Data Services. He had responsibility for P&L management, strategy development and execution, rollout of new business and industry initiatives, M&A transactions, and implementation of enhanced processes for business risk management. Previously, Andrew spent over a decade at Merrill Lynch in senior leadership roles, including COO of the firm’s Latin America and Canada business, Managing Director of Strategy and Business Development, and the Head of Corporate Planning for the enterprise. In these roles, he gained valuable experience in business restructuring and management, strategy development and execution, new business development, financial reporting, planning and analysis, technology transformation, and crisis management. Technology Experience: Andrew started his career at Booz Allen & Hamilton, where, as a member of the Information Technology Group, he led consultant teams supporting financial services clients around the world. In his industry roles, he has led technology transformation projects and, as CRO for DTCC, drove major investments in resilience and cybersecurity. Background: In addition to his current service as a GARP Board Trustee, Andrew chaired and served on DTCC subsidiary boards and was a Board Member of the International Securities Services Association ("ISSA"). He received a Bachelor of Science in Mechanical Engineering from the Massachusetts Institute of Technology and also has a Master of Government Administration from the University of Pennsylvania. | | Age: 59 Director Since: March 2024 Committees: •Audit •Compensation •Investment •Nominating & Corporate Governance Key Skills: •Senior Leadership & Business Operations •Financial Services Industry •Government Policy and Regulatory •Risk Management •Corporate Governance •Capital Markets •Technology •Audit Committee Financial Expert | |
DIRECTOR SKILLS AND QUALIFICATIONS
| 12 | 2025 PROXY STATEMENT | DYNEX CAPITAL, INC. |
DIRECTOR SKILLS AND QUALIFICATIONS
| | JOY D. PALMER | | | Joy D. Palmer joined the Board in October 2020. Finance and Accounting Experience: Over the course of Joy’s 34-year career, she has served in a variety of accounting, finance, and investor relations roles. Joy is an expert in Generally Accepted Accounting Principles (“GAAP”), regulatory policies, the mortgage finance industry, including mortgage investing and origination, as well as how market trends impact financial institutions, including national banks. Banking and Treasury Experience: Most recently, from January 2024 to December 2024, Joy served as a member of the Finance Committee for the Town of Seabrook. From 2002 to 2020 she held a variety of roles at the Comptroller of the Currency ("OCC"), Office of the Chief Accountant, including as the Deputy Chief Accountant, Accounting Policy Advisor to Large Banks and Policy Accountant of Community and Midsize Banks, where she helped oversee the regulation and supervision of national and foreign banks which operate in the U.S. During this time, Joy also contributed to the drafting of advisories, bulletins, risk tips, and other publications to provide examiners with readily accessible resources on evolving issues including mortgage banking guidelines and securitization. She also led extensive work on accounting topics such as Current Expected Credit losses ("CECL") and Troubled Debt Restructuring ("TDRs"). Prior to the OCC, Joy worked at Merrill Lynch as a Director of Equity Research focusing on specialty finance companies, banks, and the GSE's. In addition, Joy has served as a Controller and Director of Finance at two other publicly traded companies outside of the financial services sector, both of which required presentations and interactions with the board of directors on accounting and strategic initiatives. Joy started her career at Beneficial Corporation where she was responsible for aspects of Investor Relations and Treasury Management focusing on liquidity and cash management monitoring, derivatives, and capital markets activity, as well as sell-side analyst communications and presentations to the board of directors. Background: Joy received a B.A. in Accounting from Montclair State University and a MBA from NYU Stern School of Business with an emphasis in Finance. Over her career and currently, Joy has been an adjunct professor teaching classes on financial statement reporting and analysis, accounting, asset management, and tax topics. | | Age: 67 Director Since: 2020 Committees: •Audit (Chair) •Nominating & Corporate Governance •Investment Key Skills: •Financial Services Industry •Government Policy and Regulatory •Mortgage Industry •Investment Management •Audit Committee Financial Expert | |
DIRECTOR SKILLS AND QUALIFICATIONS
| DYNEX CAPITAL, INC. | 2025 PROXY STATEMENT | 13 |
DIRECTOR SKILLS AND QUALIFICATIONS
| | SMRITI L. POPENOE | Co-Chief Executive Officer and President | | | Smriti L. Popenoe joined the Board in September 2023. Smriti first joined Dynex as Chief Investment Officer in 2014 and also took on the role of President in 2020. In July 2024, she was promoted to serve alongside Mr. Boston as Co-Chief Executive Officer in addition to her role as President of Dynex. Smriti is accountable for the raising, deployment, and management of the Company’s capital and leads the team that oversees the Company's investment portfolio, associated hedges, and financing arrangements. Leadership Experience: Smriti brings over 13 years of C-Suite experience and expertise in risk management, investment leadership, and best practices in portfolio optimization. In addition to her 10 years serving on Dynex’s leadership team, she previously served as Chief Risk Officer at PHH Corporation, a leading provider of mortgage banking and fleet management outsourcing services. She currently serves on the board of Industrial Indicators, Inc. (d/b/a SmartBolts). Financial Services and Portfolio Management Experience: Smriti has three decades of experience in the financial services and risk management industries. Most recently, Smriti served from 2020 to 2024 as the Chair of the Investment Committee of the Mortgage Bankers Association. From 2006 to 2009, Smriti was Senior Vice President at Wells Fargo (then known as Wachovia Bank), where she managed its more than $100 billion investment portfolio and led the team through the financial crisis of 2009. From 2003 to 2006, she served as Senior Vice President, Investments with Sunset Financial Resources, a startup REIT. She managed an investment portfolio of $400B fixed-rate MBS and whole loans while with Freddie Mac at the beginning of her career. Background: Smriti received the Chartered Financial Analyst (CFA) designation in 1997 and holds three degrees: a B.S. in Chemistry and Environmental Science from St. Joseph’s College in Bangalore, India, a MBA from the University of Rochester and a Master’s-level French diploma from the Alliance Française. Smriti is committed to building winning teams and mentoring young professionals while pursuing her passion for the environment, personal growth, and lifelong learning. | | | Age: 56 Director Since: 2023 Committee: Investment Key Skills: •Senior Leadership & Business Operations •Financial Services Industry •Investment Management •Mortgage Industry Other Current Boards: Industrial Indicators | | |
DIRECTOR SKILLS AND QUALIFICATIONS
We are not aware of any family relationship among any director or executive officer; nor are we aware of any involvement of any director or executive officer, currently or in the past 10 years, in any legal proceedings that would be material to an evaluation of the ability or integrity of any director or executive officer. THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE DIRECTOR NOMINEES LISTED ABOVE.
DIRECTOR SKILLS AND QUALIFICATIONS
| 14 | 2025 PROXY STATEMENT | DYNEX CAPITAL, INC. |
DIRECTOR SKILLS AND QUALIFICATIONS
| CORPORATE GOVERNANCE |
DIRECTOR COMPENSATION FOR 2024*
DIRECTOR COMPENSATION FOR 2024*
DIRECTOR COMPENSATION FOR 2024*
| Name(1) | Fees Earned or Paid in Cash ($) | Stock Awards(2) ($) | All Other Compensation(3) ($) | Total ($) | | Marie Chandoha | 66,422 | — | — | 66,422 | | Julia L. Coronado, Ph.D. | 140,972 | 120,009 | 14,842 | 275,823 | | Alex I. Crawford | 90,278 | 120,009 | 8,851 | 219,138 | | Andrew I. Gray | 92,533 | 120,009 | 8,851 | 221,393 | | Michael R. Hughes (4) | 40,278 | 120,010 | 3,595 | 163,883 | | Joy D. Palmer | 136,772 | 120,009 | 14,842 | 271,623 | | Robert A. Salcetti (4) | 40,278 | 120,010 | 3,595 | 163,883 | | David H. Stevens (5) | 28,750 | — | 1,198 | 29,948 |
DIRECTOR COMPENSATION FOR 2024*
* Columns for “Option Awards,” “Non-Equity Incentive Plan Compensation” and “Change in Pension Value and Non-qualified Deferred Compensation Earnings” have been omitted because they are not applicable. (1)Mr. Boston, Co-Chief Executive Officer and Chairman of the Board, and Ms. Popenoe, Co-Chief Executive Officer, President, and Director are not included in this table because they are executive officers of the Company and did not receive additional compensation for their services as members of the Board. Mr. Boston’s and Ms. Popenoe's compensation for service as executive officers is included in the Summary Compensation Table on page 42. (2)The amounts in this column reflect the grant date fair value of grants of restricted stock to each listed director under the Company’s 2020 Plan, calculated in accordance with ASC Topic 718. The grant date fair value of the restricted stock is based on the closing price of the Company’s common stock on the grant date of March 12, 2024 for Messrs. Hughes and Salcetti, and May 17, 2024 for each of Messrs. Crawford and Gray, Dr. Coronado, and Ms. Palmer. As of December 31, 2024, Messrs. Salcetti and Hughes did not hold any shares of restricted stock, and each of Messrs. Crawford and Gray, Dr. Coronado, and Ms. Palmer held 9,517 shares of restricted stock. (3)The amounts in this column reflect dividends paid in 2024 on unvested restricted stock held by the directors. (4)Messrs. Hughes and Salcetti resigned from the Board effective March 11, 2024. They were each granted 9,472 restricted shares, which immediately vested. (5)Mr. Stevens passed away in January 2024.
DIRECTOR COMPENSATION FOR 2024*
| DYNEX CAPITAL, INC. | 2025 PROXY STATEMENT | 23 |
COMPENSATION OBJECTIVES AND PHILOSOPHY
COMPENSATION OBJECTIVES AND PHILOSOPHY Our executive compensation program is designed to attract, motivate and retain highly skilled employees who will manage the Company in a manner to: • preserve our capital; • generate positive economic return to our shareholders in the form of dividends, book value stability and potential growth; • advance the interests of our shareholders; and • maintain a culture of integrity and ensure that our compensation practices do not promote or motivate excessive risk taking by our employees. We incorporate a pay-for-performance philosophy in our compensation programs by linking incentive compensation to our operating performance and the attainment of financial, operational, and strategic objectives. We also actively promote the ownership of Company stock by our executive officers, including formal stock ownership guidelines and maintaining a compensation program focused on time-based, and performance-based, vesting equity awards. The Compensation Committee understands that the specialized nature and complexities of the Company’s business, and in particular its investment, financing, capital and risk management activities and REIT structure, require individuals with unique experience and skills. The Compensation Committee also understands the potential volatility in the Company’s performance given its use of leverage in its business model and the Company’s exposure to macroeconomic conditions, interest rates, monetary policy (globally but especially in the U.S.), regulatory policy, fiscal policy, and global geopolitics. The Company is also exposed to general market conditions for our investments which may impact their value and performance. Many factors affecting Company performance are beyond our control, and the Compensation Committee has established a compensation program and performance criteria that accounts for the potential volatility of the Company’s results on a year-to-year basis. Executive Compensation Practices. We believe the Company's executive compensation and governance practices drive performance and serve our shareholders’ long-term interests. Our pay practices include: ☑Performance-Based Pay—Our compensation program is structured to align the interests of our executive officers with the interests of our shareholders and, as a result, the majority of total compensation is tied to Company performance including absolute and relative economic return over both short- and long-term time horizons, except in the case of separation benefits. ☑Meaningful Stock Ownership Requirements—All of our executive officers are subject to meaningful stock ownership requirements that require the retention of a dollar value of the Company’s stock based on a multiple of base salary. ☑Annual Risk Assessment—Our Compensation Committee conducts an annual risk assessment of our compensation programs. ☑Independent Compensation Consultant—Our Compensation Committee periodically engages with an independent compensation consultant. Our pay practices do not include: xTax Gross-Ups—We provide no tax gross-ups. xPledging of Owned Shares—We prohibit our employees and directors from pledging their owned shares. xDerivatives Trading and Hedging—We prohibit our employees and directors from engaging in any derivatives trading or hedging transactions associated with their holdings of Company stock. Program Design. Our compensation program is designed to provide levels of compensation that are competitive and also reflective of both the Company’s and the individual’s performance in achieving our goals and objectives. The Compensation Committee seeks to establish competitive compensation practices that provide a mix of short-term and long-term incentive compensation that strikes a balance between recognition of recent performance and aligning the interests of management on a longer-term basis with that of the Company’s shareholders. Further, it is the intent of the Compensation Committee, and executive management, that this compensation philosophy be applied throughout the organization and that the types of compensation and benefits described herein provided to the executive officers generally be provided to substantially all employees of the Company, with the exception of RSUs and PSUs (generally time-based restricted stock awards
COMPENSATION OBJECTIVES AND PHILOSOPHY
vesting over three years are awarded to non-executives). The Compensation Committee also believes that it is important to pay a meaningful amount of incentive compensation in equity in order to align executive compensation with shareholder performance, as reflected in the 2024 grants under the 2020 Plan. Pay-for-Performance. The primary elements of our compensation program are base salary, annual performance-based cash incentive compensation, long-term time-based and performance-based equity compensation, and to a lesser extent, other benefits. These components of executive compensation are used together to strike an appropriate balance between cash and stock-based compensation, between short-term and long-term incentives and between guaranteed and variable compensation. As part of our pay-for-performance compensation philosophy, we expect a meaningful portion of an executive officer’s total compensation to be variable, tied to our annual and long-term performance and the creation and protection of shareholder value, and subject to ongoing employment at the Company. We believe that incentive compensation should be dependent upon corporate and individual performance for the applicable performance period, including the achievement of identified goals as they pertain to our financial performance and operations for which the executive officer is personally responsible and accountable. In addition, by historically paying a significant portion of incentive compensation in equity, the Company ensures a focus on longer-term performance objectives by aligning a portion of executive compensation to the Company’s long-term performance, as reflected in dividends paid, changes to stock price, and changes in book value per common share. Shareholder Alignment. An important consideration for the Compensation Committee is the alignment of management compensation with shareholder interests. This includes the pay-for-performance concepts discussed above such as total economic return. This concept is also incorporated in the pay structure for our executives, including a substantial portion of targeted compensation (defined as base salary, target annual cash incentive opportunity and long-term equity grants) to be paid in Company stock. As indicated in the charts below, for 2024, approximately 87% of Mr. Boston's targeted compensation, approximately 86% of Ms. Popenoe's targeted compensation, and approximately 84% of Mr. Colligan's targeted compensation are directly linked to performance objectives, after compensation adjustments resulting from position changes in 2024. The Compensation Committee believes that having a significant portion of compensation tied directly to the value of the Company’s equity and return on equity are critical to ensuring the appropriate alignment with the interests of the Company’s shareholders.
HOW EXECUTIVE PAY LEVELS ARE DETERMINED
HOW EXECUTIVE PAY LEVELS ARE DETERMINED The Compensation Committee annually reviews our executive compensation program and its elements. All decisions by the Compensation Committee relating to the compensation of our executive officers are reported to the full Board and, in the case of the Co-Chief Executive Officers' compensation, are approved by the independent directors. The Compensation Committee periodically solicits input from FPC and management for information related to peer company compensation and performance. The Compensation Committee also reviews management’s calculations of the achievement of quantitative performance metrics and management’s observations with respect to the achievement of qualitative performance goals. In determining the compensation of our executive officers, the Compensation Committee evaluates total overall compensation (for our executive officers as well as our entire employee base), as well as the mix of salary and incentive compensation, using a number of factors including the following: • historical cash and equity compensation levels; • the financial performance of the Company primarily as measured by changes in book value per common share and total economic return (defined as dividends per share and the change in book value per common share divided by beginning book value per common share); • the operating performance of the Company; • the performance of the executive officers, as determined by the Compensation Committee; and • comparative industry and market data. With respect to comparative industry data, with assistance from management, and in some years FPC, the Compensation Committee periodically reviews executive salaries, compensation structures and the financial performance of comparable companies in a designated peer group recommended by FPC. The peer group used for comparison purposes may change from year to year but focuses principally on internally managed public mortgage REITs that have a similar market capitalization and/or have a similar business to ours or that are similar to the Company in asset management and investment complexity. During 2023, the Compensation Committee engaged FPC to examine market compensation practices among comparably sized companies and real estate financed-focused REITs to assist in updating the compensation program for the Company’s executive officers. The Compensation Committee, with input from FPC, developed a peer group that included real estate finance companies similar to us based on business strategy, asset class focus, and size and executives with similar skills and experience as our executives. The peer group consisted of Chimera Investment Corporation, Granite Point Mortgage Trust, Hannon Armstrong, MFA Financial Inc, New York Mortgage Trust, Pennymac Mortgage Investment
HOW EXECUTIVE PAY LEVELS ARE DETERMINED
Trust, Redwood Trust, and Two Harbors Investment Corporation. The peer mortgage REITs consisted of both commercial and residential mortgage REITs. Externally-managed mortgage REITs are excluded from our peer group due to the limited publicly available comparative compensation data for their executives. The peer group data is intended to provide the Compensation Committee with insight into market pay levels, market trends, governance practices, and industry performance. The compensation analysis for each peer group combined to provide an overview of typical compensation components (e.g., base salaries, annual bonuses and long-term equity incentives), as well as the range of compensation levels by position. The Compensation Committee continues to use the peer group for evaluating market compensation practices, updated, as necessary, to exclude companies that were acquired. The Compensation Committee uses peer group data for informational purposes and to assess the competitiveness of each NEO’s overall compensation, which is one aspect of the Compensation Committee’s decision-making process.
COMPENSATION DECISIONS MADE IN 2024
Annual Cash Incentive Compensation. The Cash Incentive Plan begins each January 1 and is an annual bonus plan, paid solely in cash, with a target incentive opportunity for the executive officers set forth in the table below. The plan uses a mix of quantitative and qualitative objectives with a combination of fixed and variable weightings for the metrics selected. The Compensation Committee views the Cash Incentive Plan as a clearly established cash incentive compensation framework for executive officers that is appropriately aligned with the interests of shareholders. The Compensation Committee believes that the Cash Incentive Plan’s inclusion of performance metrics that incent management to create shareholder value, including absolute and relative book value per common share, capital growth, expense management and other qualitative and strategic metrics are important to the Company’s incentive compensation objectives. Incentive compensation under the Cash Incentive Plan is designed to be performance based and is not guaranteed to be paid in any year. Individuals serving as executive officers each year are eligible to participate in the Cash Incentive Plan. For 2024, the participants were Messrs. Boston and Colligan and Ms. Popenoe. When Ms. Popenoe was promoted in July 2024 to Co-Chief Executive Officer in addition to her roles as President and Chief Investment Officer, her target and maximum annual cash incentive award opportunity was increased to match Mr. Boston's at 200% and 400% of base salary, respectively. When Mr. Colligan was promoted in July 2024 to serve as Chief Operating Officer in addition to his roles as Chief Financial Officer and Secretary, his target and maximum annual cash incentive award opportunity was increased to 175% and 350% of base salary, respectively.
COMPENSATION DECISIONS MADE IN 2024
| Annual Cash Incentive Plan for 2024 | | | | | | | | | | | Performance Target | | | | | | | Performance Metric/Objective | Weighting | Minimum | Target | Maximum | Value Achieved | Percentage of Target Achieved | Weighted Average Percentage Achieved | | Change in absolute book value per common share | 27.5% | (10.0)% | —% | 10.0% | (4.6)% | 54.2% | 14.9% | | Relative book value per common share | 27.5% | 30% | 55% | 80% | 83% | 200.0% | 55.0% | | Corporate/Individual Objectives: | | | | | | | | | Capital raising | 10.0% | $50 million | $100 million | $150 million | $332 million | 200.0% | 20.0% | | Expense Management (1) | 5.0% | 4.35% | 3.75% | 3.15% | 3.51% | 140.3% | 7.0% | | Strategic objectives(2) | 30.0% | —% | 100.0% | 200.0% | N/A | 200.0% | 60.0% | | TOTALS | 100.0% | | | | | | 156.9% |
COMPENSATION DECISIONS MADE IN 2024
| Annual Cash Incentive Plan for 2024 | | | | | | Metric | Weighted Average Percentage of Target Achieved | Byron L. Boston | Smriti L. Popenoe | Robert S. Colligan | | Base Salary as of December 31, 2024 | | $900,000 | $900,000 | $560,000 | | Target incentive bonus % | | 200% | 200% | 175% | | Target incentive bonus | | $1,800,000 | $1,800,000 | $980,000 | | Maximum incentive bonus % | | 400% | 400% | 350% | | Maximum incentive bonus | | $3,600,000 | $3,600,000 | $1,960,000 | | Annual Cash Bonus Earned | 156.9% | $2,824,433 | $2,824,433 | $1,537,747 |
LONG-TERM EQUITY INCENTIVE COMPENSATION
LONG-TERM EQUITY INCENTIVE COMPENSATION Long-term EIC for 2024 issued under the 2020 Plan consists of grants of time-based RSUs and grants of performance-based PSUs with a three-year performance period. The Compensation Committee determined the following values for the 2024 awards under the 2020 Plan for each executive officer, allocating 60% to PSUs and 40% to RSUs:
LONG-TERM EQUITY INCENTIVE COMPENSATION
| | 2024 Long-Term EIC Value(1) | Target # of PSUs(2) | # of RSUs(2) | | Byron L. Boston | $3,100,000 | 152,459 | 101,640 | | Smriti L. Popenoe | 2,200,000 | 108,197 | 72,131 | | Robert S. Colligan | 1,250,000 | 61,476 | 40,984 |
LONG-TERM EQUITY INCENTIVE COMPENSATION
(1)Long-term EIC values are based on target number of PSUs and each executive's base salary as of January 1, 2024. (2)The number of units awarded was calculated using the average closing price of the common stock for the 20 trading days ending the day before the grant date. Beginning with the EIC award granted in 2025, the minimum target amount for the annual long-term EIC award was increased to $3,100,000 from $2,200,000 for Ms. Popenoe and increased to 250% of annual base salary from $652,500 for Mr. Colligan. Mr. Boston's minimum target amount for the EIC award granted in 2025 remains at $3,100,000. The RSUs are time-based awards that vest in equal installments over 3 years. Any RSUs that vest will be paid in shares of the Company’s common stock. Dividend equivalents will accrue on the RSUs and will be paid in cash to the executive officer only if and to the extent the RSUs vest. If an executive officer retires after reaching 65 years of age and has been employed by the Company a minimum of 10 years, any unvested RSUs will automatically vest in full on the date of the executive officer's retirement, provided that the executive officer signs and does not revoke a release agreement. The PSUs cliff vest at the end of a three-year performance period based on the achievement of absolute and relative total economic return (“TER”) as noted in the following table:
LONG-TERM EQUITY INCENTIVE COMPENSATION
| DYNEX CAPITAL, INC. | 2025 PROXY STATEMENT | 35 |
LONG-TERM EQUITY INCENTIVE COMPENSATION
| Metric | Weighting | | Absolute TER | 50% | | Relative TER compared to peer group | 50% | | Absolute TSR/Absolute TER | Vesting cap |
LONG-TERM EQUITY INCENTIVE COMPENSATION
The Compensation Committee established these metrics as the most critical performance metrics for the Company over the long-term and in accordance with the Company’s compensation philosophy regarding shareholder alignment as described above. The Compensation Committee selected a peer group consisting of AGNC Investment Corp., Annaly Mortgage Corporation, Inc., Armour Residential REIT, Inc., Invesco Mortgage Capital, Inc., Orchid Island Capital, Inc., and Two Harbors Investment Corp., mortgage REITs with business models similar to the Company’s current or anticipated business model, and excluded certain credit-risk oriented mortgage REITs. The peer group used to measure performance is different than the peer group used to establish compensation levels, since the companies listed directly above have very similar portfolios but range in size from much larger than Dynex to much smaller. In addition, several of the companies listed directly above are externally managed and do not have disclosed compensation for their executives, while still being a performance peer and invest in similar assets. The Compensation Committee established threshold, target, and maximum performance levels for each performance metric, as well as a vesting cap limiting the vesting of the applicable portion of the PSUs to target level if the Company’s TER or its total shareholder return for the performance period is negative. For the absolute TER performance, the Committee considered multiple factors including the macroeconomic environment, the Company’s outlook with respect to its earnings profile, investment opportunities, the mortgage market, and expectation for U.S. and global monetary policy. The Committee established an annualized TER target of 9% with a threshold of 4% annually and a maximum of 14% annually. These targets are consistent with the 2023 targets and 2024 business plans, however the performance in 2024 was higher than 2023. In establishing these targets, the compensation committee intends to provide meaningful targets and goals without incenting management to take excessive risk For the relative TER performance measure, the Committee, based on FPC’s 2023 recommendation, established threshold, target, and maximum peer rankings of the 30th percentile, 55th percentile and 80th percentile, respectively. To determine the level of PSUs earned, after the end of the three-year performance period, the Compensation Committee will determine the level of performance achieved with respect to each of the performance metrics. Performance for each metric can range from 0-200% of the target number of PSUs, based on the achievement over the three-year performance period ending December 31, 2025 for the PSUs granted in 2023 and ending December 31, 2026 for the PSUs granted in 2024. Any PSUs earned based on the achievement with respect to such goals will vest on December 31, 2025 and December 31, 2026, respectively, and be paid in shares of the Company’s common stock by February 28, 2026 and March 15, 2027, respectively. Dividend equivalents will accrue on the PSUs and will be paid in cash to the executive officer only if and to the extent the PSUs vest. If an executive officer retires after reaching 65 years of age and has been employed by the Company a minimum of 10 years, any unvested PSUs will vest based on the level of performance achieved as measured from the grant date through the date of the executive officer's retirement, provided that the executive officer signs and does not revoke a release agreement. Performance Period ending December 31, 2024. The PSUs granted in 2022 ended their performance period at December 31, 2024 and performance was based on absolute TER, relative TER and relative TSR metrics. None of the absolute TER shares vested, 100% of the relative TER shares vested and 200% of the relative TSR shares vested.
LONG-TERM EQUITY INCENTIVE COMPENSATION
| 36 | 2025 PROXY STATEMENT | DYNEX CAPITAL, INC. |
LONG-TERM EQUITY INCENTIVE COMPENSATION
The tables below set forth the PSU performance metrics for the period January 1, 2024 – December 31, 2026:
LONG-TERM EQUITY INCENTIVE COMPENSATION
| Absolute TER (Weighting: 50%) | | | | | Performance Level | TER Performance (per common share) | TER Performance as a Percentage Increase | Absolute TER Vesting Percentage | | Maximum | $5.59 | 42% | 200% | | Target | $3.59 | 27% | 100% | | Threshold | $1.60 | 12% | 1% | | Below Threshold | Below $1.60 | —% | —% |
LONG-TERM EQUITY INCENTIVE COMPENSATION
| Relative TER (Weighting: 50%) | | | | Performance Level | Relative TER | Relative TER Vesting Percentage | | Maximum | 80th Percentile or above | 200% | | Target | 55th Percentile | 100% | | Threshold | 30th Percentile | 50% | | Below Threshold | Below 30th Percentile | —% |
LONG-TERM EQUITY INCENTIVE COMPENSATION
2020 Stock and Incentive Plan. Under the 2020 Plan, the Compensation Committee has the ability to award equity compensation in the form of stock options, restricted stock, restricted stock units, stock appreciation rights (“SARs”), performance units and performance cash awards to key employees, non-employee directors, consultants and advisors in its discretion. The Board believes a competitive equity incentive program is essential to offering compensation that aligns participants’ interests with those of our shareholders. The goal of the Compensation Committee in granting equity incentives is to link an executive’s compensation opportunities with creating and protecting shareholder value. The Company uses performance stock units (with performance-based vesting provisions) and restricted stock units (with time-based vesting provisions) in its executive compensation program. The Compensation Committee views equity incentive awards as a strong alignment of interests by making employees direct (or in the case of units, indirect) owners of the Company while providing performance incentive for employees as well as incentives to remain with the Company as their awards vest. The Compensation Committee uses multi-year vesting of equity incentive awards. Multi-year vesting focuses executive officers on consistent long-term growth in shareholder value and requires executive officers to remain employed with us for extended periods to receive the full benefit of the awards unless they are eligible for retirement as defined within the terms of each award agreement. Most of the Company’s equity incentive awards have three-year vesting periods. Timing of Equity Awards. We are aware that the release of our quarterly financial results may have an impact on the market price of our common stock, and therefore the value of the equity awards to our executive officers, as well as stock grants awarded to directors, depending on whether the information is favorable or unfavorable. Our historical practice with respect to the timing of equity awards has been to approve such grants once each year in the first quarter of the year following the year to which the award pertains. We anticipate that future grants generally will be awarded in the first quarter after the Company has released its fourth quarter results for the prior year. The Company currently does not grant new awards of stock options, stock appreciation rights, or similar option-like equity incentives and does
LONG-TERM EQUITY INCENTIVE COMPENSATION
| DYNEX CAPITAL, INC. | 2025 PROXY STATEMENT | 37 |
LONG-TERM EQUITY INCENTIVE COMPENSATION
not have any such awards outstanding for any of its employees. Non-employee directors receive annual grants of restricted stock on the first Friday following the annual meeting of shareholders, generally in May or June of each year, which shares generally vest at the end of one year. In the case of grants to our non-employee directors, we believe that the annual meeting of shareholders is an appropriate time during the year to make equity grants and that a consistent application of our equity granting practices from year to year regardless of the content of the first quarter earnings release is also appropriate. The equity awards granted by the Compensation Committee are designed to incent creation of long-term shareholder value and contain delayed vesting provisions that prevent recipients from taking advantage of short-term fluctuations in the market price of our common stock. We have not planned in the past, nor do we plan in the future, to time the release of material non-public information for the purpose of affecting the value of executive or director compensation. Clawback Policies. In 2023, the Company adopted a clawback policy as required by Exchange Act Rule 10D-1 and the related New York Stock Exchange Listed Company Manual listing standards adopted pursuant to Rule 10D-1. The clawback policy requires clawback of erroneously awarded incentive compensation paid to current and former executive officers in the event of a restatement of the Company’s financial statements (without regard to the fault of the executive). Restatements that trigger such recoupment are restatements due to material noncompliance with any financial reporting requirement applicable to the Company under the federal securities laws, including restatements to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. Except in very limited circumstances, in the event of such a restatement, the clawback policy requires the recoupment of incentive compensation paid to the executive officer in excess of the amount that would have been paid if the amount of such incentive compensation had been based on the restated financial statements. The Company also adopted a discretionary clawback policy in 2023, which permits the Compensation Committee to recoup cash and equity-based incentive compensation (and any proceeds or earnings received in respect of such compensation) in the event that the covered person has been convicted of, or entered into a plea of guilty or nolo contendere with respect to, any felony. Bonus amounts paid, in cash or stock, under the Cash Incentive Plan and equity awards granted under the 2020 Plan are subject to clawback in the event repayment is required by the Company’s clawback policy described above or by law or regulation or stock exchange requirement applicable to the Company. Retirement Plans. We provide additional compensation to our executive officers through various plans which are also available to some or all of our other employees. The Compensation Committee oversees these plans and the Compensation Committee considers these plans when reviewing an executive’s total annual compensation and determining incentive awards described above. We have a 401(k) Savings Plan for all of our employees. The 401(k) Savings Plan allows eligible employees to defer up to 100% of their eligible compensation, and we have made discretionary matching contributions on a dollar-for-dollar basis up to 6% of an employee’s eligible compensation. Eligible employee deferrals and matching contributions under the 401(k) Savings Plan are subject to limitations imposed by the Internal Revenue Code. Other Benefits. The Company provides our executive officers with other personal benefits on a limited basis with overall compensation program objectives to attract and retain high quality executives. The Compensation Committee has reviewed the levels of other personal benefits provided to our executive officers and the Compensation Committee believes them to be appropriate. Details of other benefits provided to the executive officers are set forth in footnotes to the Summary Compensation Table. Employment Agreements. The Company entered into new employment agreements with Messrs. Boston and Colligan and Ms. Popenoe in 2024, effective July 19, 2024. Mr. Boston's and Ms. Popenoe's employment agreements provide for an initial term ending October 27, 2026 (consistent with their prior employment agreements), and Mr. Colligan's employment agreement provides for an initial term ending December 31, 2027. Under each employment agreement, the initial term will be extended automatically for an additional year at the end of the initial term and each year thereafter,
LONG-TERM EQUITY INCENTIVE COMPENSATION
| 38 | 2025 PROXY STATEMENT | DYNEX CAPITAL, INC. |
LONG-TERM EQUITY INCENTIVE COMPENSATION
unless either the Company or the executive gives written notice of non-renewal at least 90 days prior to the renewal date. Upon a Change in Control (as defined in the employment agreements), the term of each employment agreement will be extended automatically for a period of 2 years, unless the Change in Control occurs during the initial term and there are more than 2 years remaining in the initial term. The employment agreements provide specified salary levels, target minimum and maximum annual cash incentive amounts, and long-term EIC amounts, as described above in “Compensation Decisions Made in 2024.” Each executive is entitled to participate in the employee and executive benefit plans and programs offered by the Company in which other senior executives of the Company are eligible to participate. Under the employment agreements, each executive's employment may be terminated by the Company with or without “Cause” (as defined in the employment agreements). If the executive resigns for “Good Reason” (as defined in the employment agreements) or the executive’s employment is terminated by the Company without Cause, not in connection with a Change in Control, the executive is entitled to receive severance benefits as described in the footnotes to the Potential Payments upon Termination or Change in Control table, which include a lump sum severance payment, continued medical, dental, life and disability insurance coverage (or payment in lieu) for a period of time, a prorated annual cash incentive award for the year of termination based on performance at the greater of target or actual performance in the case of financial goals and at maximum in the case of non-financial and individual goals (or, for Mr. Colligan, based on actual performance at the end of the applicable performance period) (a “Prorated Annual Cash Incentive Award”); and full vesting of any unvested equity awards, with performance for any performance-based equity awards determined based on the terms of the applicable grant agreement. The employment agreements contain a “double trigger” provision for severance in a Change in Control context. Under this “double trigger” provision, if the executive resigns for Good Reason or the executive’s employment is terminated by the Company without Cause on or within 2 years after a Change in Control (and, for Mr. Boston and Ms. Popenoe, within 6 months prior to a Change in Control), the executive will be entitled to receive severance benefits as described in the footnotes to the Potential Payments upon Termination or Change in Control table, which include a lump sum severance payment, continued medical, dental, life and disability insurance coverage (or payment in lieu) for a period of time, a Prorated Annual Cash Incentive Award for the year of termination, and full vesting of any unvested equity awards, with performance for any performance-based equity awards determined based on the terms of the applicable grant agreement. If the executive’s employment terminates due to death, the employment agreements with Mr. Boston and Ms. Popenoe provide for a lump sum payment to the executive’s estate as described in the footnotes to the Potential Payments upon Termination or Change in Control table. In addition, each of Mr. Boston's, Ms. Popenoe's, and Mr. Colligan's employment agreements provide that the executive’s estate will be entitled to benefits as described in the footnotes to the Potential Payments upon Termination or Change in Control table including a Prorated Annual Cash Incentive Award for the year of death and full vesting of the executive’s unvested equity awards. If the executive’s employment terminates due to disability, the executive will be entitled to receive (a) an annual cash incentive award for the year of termination and (b) full vesting of any unvested equity awards, with performance for any performance-based equity awards determined based on the terms of the applicable grant agreement. Mr. Boston and Ms. Popenoe's employment agreements provide that if the Company determines not to renew the agreement at the end of any term and terminates the executive’s employment for any reason other than for Cause at the end of the term or if the executive resigns for Good Reason on account of such non-renewal of the agreement, the executive will be entitled to receive the same severance payments described above for termination by the Company without Cause or resignation for Good Reason, including the enhanced severance payable in connection with a Change in Control depending on when the non-renewal or termination occurs. Payment of all of the severance payments discussed above (other than in the event of death) is contingent on the executive signing a release in favor of the Company and its affiliates and continuing to comply with the executive’s restrictive covenant obligations described below. The employment agreements provide for Change in Control severance benefits on a “best net” approach, under which the Change in Control severance benefits will be reduced to avoid the golden parachute excise tax under Section 280G of the Internal Revenue Code only if such a reduction would cause the executive to receive
LONG-TERM EQUITY INCENTIVE COMPENSATION
| DYNEX CAPITAL, INC. | 2025 PROXY STATEMENT | 39 |
LONG-TERM EQUITY INCENTIVE COMPENSATION
more after-tax compensation than without a reduction. The employment agreements provide for a clawback of any incentive compensation by the Company, including both equity and cash compensation, to the extent required by federal or state law or regulation or stock exchange requirement. Under the employment agreements, the executives are subject to certain restrictive covenants in favor of the Company, including (i) a confidentiality covenant that applies (x) for Mr. Boston and Ms. Popenoe, during and following the executive’s employment for 5 years (or longer if the confidential information is a trade secret or is required in an employment agreement) and (y) for Mr. Colligan, indefinitely, (ii) a non-solicitation covenant that applies during and for 12 months following the executive’s employment, and (iii) (x) for Mr. Boston and Ms. Popenoe, a non-competition covenant that applies during the executive’s employment and for 90 days following the executive’s employment if the executive does not receive severance benefits or for 6 months following the executive’s employment if he or she receives severance benefits, and (y) for Mr. Colligan, a non-competition covenant that applies during his employment and for one year following his employment. In the event that Mr. Boston or Ms. Popenoe receive the enhanced severance payable in connection with a Change of Control, the non-competition covenant will continue to apply for 24 months following the executive's employment. See further discussion under “Potential Payments upon Termination or Change in Control” below.
LIMITATIONS ON CERTAIN SHORT-TERM OR SPECULATIVE TRANSACTIONS IN THE COMPANY’S SECURITIES
LIMITATIONS ON CERTAIN SHORT-TERM OR SPECULATIVE TRANSACTIONS IN THE COMPANY’S SECURITIES The Board has approved a Statement of Policy Regarding Trading in Company Securities reasonably designed to promote compliance with insider trading laws, rules and regulations (the “Insider Trading Policy”). The Insider Trading Policy applies to all directors, officers and employees of the Company and helps ensure that the Company’s personnel bear the full risks and benefits of stock ownership. The Insider Trading Policy prohibits directors and executive officers, among others, from engaging in short-term or speculative transactions in the Company’s securities, such as short sales, trading in publicly traded derivative securities, and hedging transactions. The Insider Trading Policy also prohibits directors and executive officers, among others, from holding the Company’s securities in margin accounts and from pledging the Company’s securities. Our Insider Trading Policy is filed with the SEC as an exhibit to our Annual Report on Form 10-K.
COMPENSATION OF EXECUTIVE OFFICERS
| Summary Compensation Table | | | | | | | | Name and Principal Position | Year | Salary ($) | Stock Awards(1) ($) | Non-Equity Incentive Plan Compensation(2) ($) | All Other Compensation(3) ($) | Total ($) | | Byron L. Boston | 2024 | 900,000 | 3,176,238 | 2,824,433 | 298,917 | 7,199,588 | | Co-Chief Executive Officer and Chairman of the Board | 2023 | 850,000 | 2,931,062 | 2,269,800 | 126,377 | 6,177,239 | | | 2022 | 800,000 | 1,480,618 | 1,824,444 | 125,621 | 4,230,683 | | Smriti L. Popenoe (4) | 2024 | 844,295 | 2,254,100 | 2,824,433 | 233,026 | 6,155,854 | | Co-Chief Executive Officer, President, Chief Investment Officer, and Director | 2023 | 750,000 | 2,595,663 | 2,017,600 | 142,863 | 5,506,126 | | | 2022 | 700,000 | 1,133,592 | 1,396,840 | 73,292 | 3,303,724 | | Robert S. Colligan (5) | 2024 | 526,577 | 1,280,750 | 1,537,747 | 34,174 | 3,379,248 | | Chief Financial Officer, Chief Operating Officer and Secretary | 2023 | 500,000 | 670,811 | 945,750 | 21,800 | 2,138,361 | | | 2022 | 229,167 | — | 427,604 | 333 | 657,104 |
GRANTS OF PLAN BASED AWARDS
GRANTS OF PLAN BASED AWARDS The following table sets forth each equity award granted to our named executive officers during 2024. All equity awards granted to our named executive officers were made under the 2020 Plan.
GRANTS OF PLAN BASED AWARDS
| Grants of Plan-Based Awards for 2024 | | | | | | | | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units(3) (#) | Grant Date Fair Value of Stock and Option Awards(4) ($) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Byron L. Boston | | — | 1,800,000 | 3,600,000 | — | — | — | — | — | | | 3/08/24 | — | — | — | 38,877 | 152,459 | 304,918 | — | 1,905,738 | | | 3/08/24 | — | — | — | — | — | — | 101,640 | 1,270,500 | | Smriti L. Popenoe | | — | 1,800,000 | 3,600,000 | — | — | — | — | — | | | 3/08/24 | — | — | — | 27,590 | 108,197 | 216,394 | — | 1,352,463 | | | 3/08/24 | — | — | — | — | — | — | 72,131 | 901,638 | | Robert S. Colligan | | — | 980,000 | 1,960,000 | — | — | — | — | — | | | 3/08/24 | — | — | — | 15,676 | 61,476 | 122,952 | — | 768,450 | | | 3/08/24 | — | — | — | — | — | — | 40,984 | 512,300 |
GRANTS OF PLAN BASED AWARDS
(1)Reflects the target and maximum amounts that the executive officers could earn for 2024 performance under the Cash Incentive Plan. There is no threshold amount under the Cash Incentive Plan. The actual amounts earned by Messrs. Boston and Colligan and Ms. Popenoe for 2024 performance under the Cash Incentive Plan, which were paid in cash, are reported as “Non-Equity Incentive Plan Compensation” for 2024 in the Summary Compensation Table on page 42. (2)Reflects PSU awards granted to the executive officers during 2024 under the Company’s 2020 Plan, pursuant to which the executives could earn from 0 - 200% of the target number of PSUs, based on the achievement over a three-year performance period ending December 31, 2026 of TER goals for the Company as compared to a peer group and TER goals for the Company on an absolute basis. Any PSUs earned based on the achievement with respect to such goals will vest on December 31, 2026 and be paid in shares of the Company’s common stock by March 15, 2027. (3)Reflects RSU awards granted to the executive officers during 2024 under the Company’s 2020 Plan. (4)The amounts in this column reflect the grant date fair value of awards of RSUs and PSUs granted to the executive officers, calculated in accordance with ASC Topic 718. The amounts shown for the PSUs are based on the probable outcome of such awards on the date of grant, which was achievement at target level.
GRANTS OF PLAN BASED AWARDS
| DYNEX CAPITAL, INC. | 2025 PROXY STATEMENT | 43 |
HOLDINGS OF STOCK-BASED AWARDS
| Outstanding Equity Awards at 2024 Fiscal Year End | | | | | | | | Grant Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested(6) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(6) | | Name | | (#) | ($) | (#) | ($) | | Byron L. Boston | 2/23/2022 | 14,623(1) | 184,981 | — | — | | | 2/23/2022 | 66,033(2) | 835,317 | — | — | | | 3/10/2023 | 32,040(3) | 405,306 | — | — | | | 3/10/2023 | — | — | 71,732(7) | 907,410 | | | 9/8/2023 | 78,454(4) | 992,443 | — | — | | | 3/8/2024 | 101,640(5) | 1,285,746 | — | — | | | 3/8/2024 | — | — | 152,459(8) | 1,928,606 | | Smriti L. Popenoe | 2/23/2022 | 9,650(1) | 122,073 | — | — | | | 2/23/2022 | 50,556(2) | 639,533 | — | — | | | 3/10/2023 | 24,530(3) | 310,305 | — | — | | | 3/10/2023 | — | — | 54,920(7) | 694,738 | | | 9/8/2023 | 78,454(4) | 992,443 | — | — | | | 3/8/2024 | 72,131(5) | 912,457 | — | — | | | 3/8/2024 | — | — | 108,197(8) | 1,368,692 | | Robert S. Colligan | 3/10/2023 | 15,018(3) | 189,978 | — | — | | | 3/10/2023 | — | — | 33,625(7) | 425,356 | | | 3/8/2024 | 40,984(5) | 518,448 | — | — | | | 3/8/2024 | — | — | 61,476(8) | 777,671 |
STOCK VESTED
STOCK VESTED The table below presents information regarding restricted stock, RSUs, and PSUs held by our executive officers that vested during 2024.
STOCK VESTED
| Stock Awards Vested for 2024(1) | | | | | | Name | Vesting Date | Vesting Date Stock Price per Share(2) ($) | Number of Shares Acquired On Vesting(3) (#) | Value Realized on Vesting(2) ($) | | Byron L. Boston | 2/23/2024 | 12.22 | 14,291 | 174,636 | | | 2/28/2024 | 12.15 | 8,617 | 104,697 | | | 3/8/2024 | 12.50 | 25,346 | 316,824 | | | 3/10/2024 | 12.50 | 15,781 | 197,263 | | | 9/8/2024 | 12.47 | 38,643 | 481,878 | | | Total | | 102,678 | 1,275,298 | | Smriti L. Popenoe | 2/23/2024 | 12.22 | 9,397 | 114,831 | | | 2/28/2024 | 12.15 | 5,780 | 70,227 | | | 3/8/2024 | 12.50 | 17,002 | 212,525 | | | 3/10/2024 | 12.50 | 12,083 | 151,038 | | | 9/8/2024 | 12.47 | 38,643 | 481,878 | | | Total | | 82,905 | 1,030,499 | | Robert S. Colligan | 3/10/2024 | 12.50 | 7,398 | 92,475 |
STOCK VESTED
(1)None of the executive officers held or exercised any stock options or SARs during 2024. This table excludes PSU awards with a performance period ending on December 31, 2024 which were settled February 25, 2025. (2)Value realized is the number of shares multiplied by the closing stock price of the Company’s common stock on the vesting date. For purposes of this table, where a vesting date was a non-business day, the Company’s common stock closing stock price on the business day immediately prior to the vesting date was used. (3)Represents the total number of restricted stock or units that vested during 2024, without taking into account any shares or units that were withheld for applicable tax obligations.
NON-QUALIFIED DEFERRED COMPENSATION FOR 2024
NON-QUALIFIED DEFERRED COMPENSATION FOR 2024 The Company does not have a non-qualified deferred compensation plan.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL The employment agreements, the 2020 Plan, and other applicable employee benefit plans may provide for potential payments to our NEOs in connection with a termination of employment or upon a change in control of the Company. The following table shows the estimated payments to or benefits to be received by each of the NEOs upon the following termination events or upon a change in control of the Company, in each case assuming that the termination event or the change in control occurred on December 31, 2024, and assuming a stock price of $12.65, which was the closing stock price of the Company’s common stock on December 31, 2024. The amounts reflected in the following table are estimates, as the actual amounts to be paid to or received by a NEO can only be determined at the time of termination or change in control. The following table reports only amounts that are increased, accelerated or otherwise paid or payable as a result of the applicable termination or change in control event and, as a result, excludes amounts accrued through December 31, 2024, such as accrued but unpaid salary, amounts for completed performance periods, already vested equity awards, and vested account balances under the 401(k) Savings Plan. The table also excludes any amounts that are available generally to all salaried employees and in a manner that does not discriminate in favor of our executive officers. All references to employment agreements in the following table and footnotes are to the employment agreements in place as of December 31, 2024.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| | Death(1) | Termination Due to Disability | Termination Without Cause or for Good Reason Not in Connection with Change in Control(2) | Termination Without Cause or for Good Reason in Connection with a Change in Control(3)(4)(5) | Retirement | Change in Control with no Related Termination(6) | | Payments and Benefits * | ($) | ($) | ($) | ($) | ($) | ($) | | Byron L. Boston | | | | | | | | Severance | 3,206,226 | — | 6,412,451 | 9,586,615 | — | — | | Stock Awards - Accelerated Vesting(7) | 5,356,429 | 5,356,429 | 5,356,429 | 5,356,429 | 5,356,429 | 42,985 | | Health & Welfare Benefits(8) | — | 37,882 | 50,510 | 75,765 | — | — | | Total | 8,562,655 | 5,394,311 | 11,819,390 | 15,018,809 | 5,356,429 | 42,985 | | Smriti L. Popenoe | | | | | | | | Severance | 2,979,624 | — | 5,959,249 | 8,909,077 | — | — | | Stock Awards - Accelerated Vesting(7) | 4,163,357 | 4,163,357 | 4,163,357 | 4,163,357 | — | 13,358 | | Health & Welfare Benefits(8) | — | 55,551 | 74,067 | 111,101 | — | — | | Total | 7,142,981 | 4,218,908 | 10,196,673 | 13,183,535 | — | 13,358 | | Robert S. Colligan | | | | | | | | Severance | — | — | 2,097,747 | 4,396,397 | — | — | | Stock Awards - Accelerated Vesting(7) | 1,586,626 | 1,586,626 | 1,586,626 | 1,586,626 | — | — | | Health & Welfare Benefits(8) | — | — | 28,200 | 84,599 | — | — | | Total | 1,586,626 | 1,586,626 | 3,712,573 | 6,067,622 | — | — |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
* Column for "Termination For Cause or Without Good Reason" was omitted because there are no benefits for a termination for cause or a voluntary termination without good reason (other than on account of retirement).
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| 46 | 2025 PROXY STATEMENT | DYNEX CAPITAL, INC. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
(1)Under their employment agreements, if Mr. Boston’s or Ms. Popenoe’s employment terminates due to death, his or her estate will be entitled to receive a lump sum payment of an amount equal to the sum of (i) his or her annual base salary at the time of his or her death and (ii) the average of his or her annual cash incentive award paid for the prior 3 years. (2)Under their employment agreements, if Mr. Boston or Ms. Popenoe resigns for good reason or his or her employment is terminated without cause (other than due to death or disability) not in connection with a change in control, he or she will be entitled to receive a lump sum severance payment equal to two times the sum of (i) his or her annual base salary at the time of termination and (ii) the average of his or her annual cash incentive award paid for the prior 3 years. Under his employment agreements, if Mr. Colligan resigns for good reason or his employment is terminated without cause (other than due to death or disability) not in connection with a change in control, he will be entitled to receive a lump sum severance payment equal to one times the sum of (i) his annual base salary at the time of termination and (ii) his annual cash incentive award for 2023 (i.e., the year immediately prior to the year of such termination). (3)Under their employment agreements, if Mr. Boston or Ms. Popenoe resigns for good reason or his or her employment is terminated without cause (other than due to death or disability) within 6 months prior to or on or within 2 years after a change in control, he or she will be entitled to receive a lump sum severance payment equal to 2.99 times the sum of (i) his or her annual base salary at the time of termination and (ii) the average of his or her annual cash incentive award paid for the prior 3 years. (4)Under his employment agreement, if Mr. Colligan resigns for good reason or his employment is terminated without cause (other than due to death or disability) on or within 2 years after a change in control, he will be entitled to receive a lump sum severance payment equal to 2.99 times the sum of (i) his annual base salary at the time of termination and (ii) the average of his annual cash incentive award paid for the prior 3 years (subject to such adjustment as the Compensation Committee deems appropriate if Mr. Colligan has worked less than 3 calendar years and taking into account the partial year 2022, the year in which his employment began). (5)Messrs. Boston’s and Colligan's and Ms. Popenoe’s employment agreements provide for change in control benefits on a “best net” approach, under which the executive’s change in control benefits will be reduced to avoid the golden parachute excise tax under Section 280G of the Internal Revenue Code only if such a reduction would cause him or her to receive more after-tax compensation than without a reduction. The amounts shown in this column do not reflect any reductions that might be made pursuant to these provisions. (6)These amounts represent the fair value as of December 31, 2024 of restricted stock awards with accelerated vesting on a change in control, and which subsequently vested according to their terms in February 2025. (7)RSUs granted to the executive officers generally become fully vested upon (a) termination of the executive officer’s employment due to disability or death or retirement at or after attaining the age of sixty-five with 10 years of service to the Company where there is no cause for termination or (b) termination of the executive officer’s employment for good reason (as defined in their employment agreements) or termination of the executive officer’s employment without cause (as defined in their employment agreements), in each case whether before or after a change in control. The RSUs granted to Mr. Boston and Ms. Popenoe on September 8, 2023 do not include vesting upon retirement. PSUs granted to the executive officers become vested based on actual performance through the date of termination or change in control (or the last day of the applicable performance period, if earlier), as applicable, upon (a) termination of the executive officer’s employment due to disability or death or retirement at or after age sixty-five where there is no cause for termination or (b) termination of the executive officer’s employment for good reason (as defined in their employment agreements) or termination of the executive officer’s employment without cause (as defined in their employment agreements) outside of a change in control scenario or during the 6 months prior to a change in control or 18 months following a change in control. The PSUs in the table equal the number of PSUs already granted multiplied by the performance percentage determined based on the actual performance during the period determined with December 31, 2024 as the last day of the performance period. The RSUs and PSUs require the executive officer to sign and not revoke a general release (other than in the event of death or in the event of a change in control in the case of the PSUs) in order to be entitled to accelerated vesting of the awards. Mr. Boston was eligible for retirement under these provisions as of November 5, 2023. Restricted shares granted to the executive officers (which vested according to their terms in February 2025) become fully vested upon (a) a change in control or (b) termination of the executive officer’s employment due to disability or death and (c) the Compensation Committee has authority to waive forfeiture in the event of termination of the executive officer’s employment for good reason (as defined in their employment agreements) or termination of the executive officer’s employment without cause (as defined in their employment agreements).The dollar amounts in the table represent the number of restricted stock, RSUs or PSUs being accelerated, multiplied by $12.65, which was the closing price of the Company’s common stock on December 31, 2024. (8)Under their employment agreements, if Mr. Boston or Ms. Popenoe resigns for good reason or his or her employment is terminated without cause (other than due to death or disability), he or she will be entitled to receive continued medical, dental, life and disability insurance coverage (or payment in lieu) for 24 months in the case of termination not in connection with a change in control or for 36 months in the case of termination within 6 months prior to or on or within 2 years after a change in control. If the Company terminates Mr. Boston or Ms. Popenoe due to disability, he or she will be entitled to receive continued medical, dental, life and disability insurance coverage (or payment in lieu of) for 18 months. Under his employment agreement, if Mr. Colligan resigns for good reason or his employment is terminated without cause (other than due to death or disability), he will be entitled to receive an amount equal to the monthly cost of continued medical, dental, life and disability insurance coverage for 12 months in the case of termination not in connection with a change in control or for 36 months in the case of termination on or within 2 years
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| DYNEX CAPITAL, INC. | 2025 PROXY STATEMENT | 47 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
after a change in control. The amounts shown in this row represent the net present value of the estimated benefits costs in each case.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE The following table provides information about the relationship between compensation actually paid (as determined under SEC rules) to Mr. Boston and Ms. Popenoe, our principal executive officers (“PEOs”) and the average our non-PEO NEOs and certain financial performance measures of the Company. For further information concerning the Company’s variable pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to “Executive Compensation — Compensation Discussion and Analysis.”
PAY VERSUS PERFORMANCE
| Pay Versus Performance Table | | | | | | | | | | | | Year | Summary Comp- ensation Table Total for PEO (Mr. Boston)(1) | Compen- sation Actually Paid to PEO (Mr. Boston) | Summary Comp- ensation Table Total for PEO (Ms. Popenoe) (1) | Compen- sation Actually Paid to PEO (Ms. Popenoe) | Average Summary Compen- sation Table Total for non-PEO NEOs(1) | Average Compen- sation Actually Paid to non-PEO NEOs(1) | Value of Initial Fixed $100 Investment Based on: | | Net Income (Loss) ($ in thousands) | Total Economic Return %(4) | | | | | | | | | Total Share-holder Return(2) | Peer Group Total Share-holder Return(2)(3) | | | | 2024 | $7,199,588 | $7,172,854 | $6,155,854 | $6,123,214 | $3,379,248 | $3,422,066 | 128.99 | 79.95 | $113,898 | 7.4% | | 2023 | 6,177,239 | 5,889,056 | N/A | N/A | 3,822,244 | 3,733,285 | 113.47 | 79.78 | (6,130) | 1.0% | | 2022 | 4,230,683 | 3,702,486 | N/A | N/A | 3,084,333 | 2,907,635 | 101.29 | 69.26 | 143,161 | (9.4)% | | 2021 | 4,476,138 | 4,089,845 | N/A | N/A | 2,665,564 | 2,504,410 | 119.67 | 94.04 | 102,261 | 2.5% | | 2020 | 3,875,179 | 4,813,278 | N/A | N/A | 1,976,652 | 2,327,810 | 117.01 | 81.38 | 177,529 | 15.2% |
PAY VERSUS PERFORMANCE
(1)For July 22, 2024-December 31, 2024, Mr. Boston and Ms. Popenoe served as Co-Chief Executive Officers (Co-PEOs). For 2020-July 21, 2024, Mr. Boston served as our Chief Executive Officer and sole PEO. During 2024, Mr. Colligan was the only NEO who was a non-PEO for the entire year. For 2023, our non-PEO NEOs were Mr. Colligan and Ms. Popenoe. For 2022, our non-PEO NEOs were Stephen J. Benedetti (former Executive Vice President, Chief Financial Officer, and Chief Operating Officer), Mr. Colligan, and Ms. Popenoe. For 2020 and 2021, our non-PEO NEOs were Mr. Benedetti and Ms. Popenoe. (2)Total Shareholder Return ("TSR") for the Company and the Peer Group assume $100 invested on December 31, 2019. (3)The Peer Group Total Shareholder Return is calculated based on the FTSE NAREIT Mortgage REIT Index. (4)Total economic return ("TER") percentage is the sum of dividends declared per common share during the year plus the change in book value per common share for the year divided by the beginning book value per common share. While the Company uses numerous financial and non-financial performance measures for the purpose of evaluating performance, the Company has determined that TER is the financial measure that, in the Company’s assessment, represents the most important performance measure (that is not otherwise required to be disclosed in the table) used by the Company to link compensation actually paid to the Company’s NEOs, for the most recently completed fiscal year, to Company performance. TER is a performance measure for our executives' PSU awards.
PAY VERSUS PERFORMANCE
| 48 | 2025 PROXY STATEMENT | DYNEX CAPITAL, INC. |
PAY VERSUS PERFORMANCE
Compensation actually paid represents the Summary Compensation Table Total adjusted for the following items:
PAY VERSUS PERFORMANCE
| | Year 2024 | | | | Adjustments to Summary Compensation Table Total to Calculate Compensation Actually Paid | PEO (Mr. Boston) | PEO (Ms. Popenoe) | Average for non-PEO NEOs | | Decrease for amounts reported under the "Stock Awards" column in the Summary Compensation Table | $(3,176,238) | $(2,254,100) | $(1,280,750) | | Increase for fair value at year-end of awards granted during year that remain outstanding and unvested as of year-end | 1,928,606 | 2,281,149 | 1,296,119 | | Increase for fair value at vesting date of awards that were granted and vested during the year | 1,270,500 | — | — | | Increase for change in fair value from prior year-end to current year-end of awards granted in prior years that were outstanding and unvested as of year-end | 57,556 | 39,468 | 27,597 | | Decrease for change in fair value from prior year-end to vesting date of awards granted in prior years that vested during year | (107,158) | (99,157) | (148) | | Total adjustments | $(26,734) | $(32,640) | $42,818 |
PAY VERSUS PERFORMANCE
| | Year 2023 | | | Adjustments to Summary Compensation Table Total to Calculate Compensation Actually Paid | PEO | Average for non-PEO NEOs | | Decrease for amounts reported under the "Stock Awards" column in the Summary Compensation Table | $(2,931,062) | $(1,633,237) | | Increase for fair value at year-end of awards granted during year that remain outstanding and unvested as of year-end | 2,962,858 | 1,656,840 | | Increase for fair value at vesting date of awards that were granted and vested during the year | — | — | | Decrease for change in fair value from prior year-end to current year-end of awards granted in prior years that were outstanding and unvested as of year-end | (303,654) | (109,372) | | Decrease for change in fair value from prior year-end to vesting date of awards granted in prior years that vested during year | (16,325) | (3,190) | | Total adjustments | $(288,183) | $(88,959) |
PAY VERSUS PERFORMANCE
| DYNEX CAPITAL, INC. | 2025 PROXY STATEMENT | 49 |
PAY VERSUS PERFORMANCE
| | Year 2022 | | | Adjustments to Summary Compensation Table Total to Calculate Compensation Actually Paid | PEO | Average for non-PEO NEOs | | Decrease for amounts reported under the "Stock Awards" column in the Summary Compensation Table | $(1,480,618) | $(609,194) | | Increase for fair value at year-end of awards granted during year that remain outstanding and unvested as of year-end | 1,398,422 | 337,235 | | Increase for fair value at vesting date of awards that were granted and vested during the year | — | 261,096 | | Decrease for change in fair value from prior year-end to current year-end of awards granted in prior years that were outstanding and unvested as of year-end | (401,858) | (78,797) | | Decrease for change in fair value from prior year-end to vesting date of awards granted in prior years that vested during year | (44,143) | (87,038) | | Total adjustments | $(528,197) | $(176,698) |
PAY VERSUS PERFORMANCE
| | Year 2021 | | | Adjustments to Summary Compensation Table Total to Calculate Compensation Actually Paid | PEO | Average for non-PEO NEOs | | Decrease for amounts reported under the "Stock Awards" column in the Summary Compensation Table as well as amounts reported under the "Non-Equity Incentive Plan Compensation" column in the Summary Compensation Table for the portion of such long-term incentive compensation earned for performance during the three-year performance period ended December 31, 2021 that was paid in shares of the Company's common stock | $(1,623,209) | $(887,360) | | Increase for fair value at year-end of awards granted during year that remain outstanding and unvested as of year-end | 1,255,337 | 734,894 | | Decrease for change in fair value from prior year-end to current year-end of awards granted in prior years that were outstanding and unvested as of year-end | (87,125) | (36,999) | | Increase for change in fair value from prior year-end to vesting date of awards granted in prior years that vested during year | 68,704 | 28,311 | | Total adjustments | $(386,293) | $(161,154) |
PAY VERSUS PERFORMANCE
| | Year 2020 | | | Adjustments to Summary Compensation Table Total to Calculate Compensation Actually Paid | PEO | Average for non-PEO NEOs | | Decrease for amounts reported under the "Stock Awards" column in the Summary Compensation Table | $(890,775) | $(445,388) | | Increase for fair value at year-end of awards granted during year that remain outstanding and unvested as of year-end | 1,793,016 | 785,420 | | Decrease for change in fair value from prior year-end to current year-end of awards granted in prior years that were outstanding and unvested as of year-end | (6,117) | (1,927) | | Increase for change in fair value from prior year-end to vesting date of awards granted in prior years that vested during year | 41,975 | 13,053 | | Total adjustments | $938,099 | $351,158 |
PAY VERSUS PERFORMANCE
| 50 | 2025 PROXY STATEMENT | DYNEX CAPITAL, INC. |
Analysis of the Information Presented in the Pay versus Performance Table
Analysis of the Information Presented in the Pay versus Performance Table The following graph illustrates the relationship between compensation actually paid to our NEOs and our TSR as well as TSR for the FTSE NAREIT Mortgage REIT Index on a cumulative basis assuming investment of $100 on December 31, 2019: The following graph compares our net income to compensation actually paid to our NEOs on an annual basis:
Analysis of the Information Presented in the Pay versus Performance Table
| DYNEX CAPITAL, INC. | 2025 PROXY STATEMENT | 51 |
Analysis of the Information Presented in the Pay versus Performance Table
The Company accounts for its investments purchased prior to January 1, 2021 as available-for-sale with changes in fair value recorded in "other comprehensive income (loss)." Effective January 1, 2021, the Company elected the fair value option for its investments purchased on or after that date with changes in fair value reported in "net income." As a result, net income (loss) for the years presented above in the Pay versus Performance Table and in the graph above does not include other comprehensive income (loss) of $(93.5) million, $(73.5) million, $(188.1) million, $22.8 million, and $(14.0) million, respectively. The following graph illustrates the relationship between compensation actually paid to our NEOs and our total economic return:
CEO PAY RATIO
CEO PAY RATIO We determined that the 2024 annual total compensation of the median compensated employee, from all our employees who were employed as of December 31, 2024, other than our principal executive officers, Mr. Boston and Ms. Popenoe, was $169,300; our principal executive officers' 2024 annual total compensation was $7,199,588 for Mr. Boston and $6,155,854 for Ms. Popenoe; and the ratio of these amounts was 1 to 42.5 for Mr. Boston and 1 to 36.4 for Ms. Popenoe. This ratio is appropriately viewed as an estimate. As of December 31, 2024, our total population consisted of 22 employees, all located in the United States. This population consisted of all of our full-time and part-time employees. To identify the median compensated employee, we used Medicare wages and tips for the period from January 1, 2024 to December 31, 2024 as reported to the Internal Revenue Service on Box 5 of Form W-2. We did not annualize pay for those individuals not employed for a full year in 2024 or make any cost-of-living adjustments in identifying the median compensated employee. Once we identified our median compensated employee, we calculated the median compensated employee’s and our principal executive officers' 2024 annual total compensation in accordance with the requirements of the Summary Compensation Table. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
CEO PAY RATIO
| DYNEX CAPITAL, INC. | 2025 PROXY STATEMENT | 53 |
CEO PAY RATIO
| PROPOSAL TWO ADVISORY AND NON-BINDING VOTE TO APPROVE EXECUTIVE COMPENSATION |
CEO PAY RATIO
As required under Section 14A of the Exchange Act, we are providing our shareholders the opportunity to vote to approve, on an advisory and non-binding basis, the compensation of our named executive officers as disclosed in this Proxy Statement in accordance with the SEC’s rules. As described in detail under the heading “Executive Compensation — Compensation Discussion and Analysis,” our executive compensation program is designed to attract and retain highly skilled and motivated officers who will manage the Company in a manner to promote our growth and profitability, prudently preserve our capital, and advance the interests of our shareholders. Under this program, our named executive officers are rewarded for the achievement of specific annual, long-term and strategic goals, corporate goals, and the realization of shareholder value. Please read the “Compensation Discussion and Analysis” for additional details about our executive compensation program, including information about the 2024 fiscal year compensation of our named executive officers. The Compensation Committee annually reviews the compensation programs for our named executive officers to ensure they achieve the desired goal of striking a balance between recognition of recent achievements and aligning the interests of management on a longer-term basis with that of the Company’s shareholders. We are asking our shareholders to indicate their support for our named executive officer compensation as described in this Proxy Statement by voting for this proposal. This proposal, commonly known as a “say-on-pay” proposal, gives our shareholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we are asking our shareholders to vote “FOR” the following resolution at the Annual Meeting: “RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2025 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and related disclosure.” This say-on-pay vote is advisory, and therefore not binding on the Company, the Compensation Committee or the Board. The Board and the Compensation Committee value the opinions of our shareholders and we will consider our shareholders’ concerns and the outcome of this vote when making future compensation decisions regarding our executive officers. We anticipate that the next vote on a say-on-pay proposal will occur at the 2026 Annual Meeting of Shareholders.