DEF 14A of Annaly Capital Management Inc, Apr 4, 2024

DEF 14A of Annaly Capital Management Inc

Filed Apr 4, 2024 · FY20230001104659-24-043638

Open on EDGAR

  1. Voluntary Electronic Receipt of Future Proxy Materials

    | EXECUTIVE COMPENSATION TABLES | 54 | | Summary Compensation Table | 54 | | Grants of Plan-Based Awards | 55 | | Outstanding Equity Awards at Fiscal Year-End | 56 | | Stock Vested in 2023 | 57 | | Pension Benefits and Nonqualified Deferred Compensation | 57 | | Potential Payments Upon Termination or Change in Control | 57 | | Compensation Committee Interlocks and Insider Participation | 59 | | CEO Pay Ratio | 59 | | PAY FOR PERFORMANCE DISCLOSURE | 60 | | Pay Versus Performance | 60 | | Financial Performance Measures | 62 | | Relationship between Financial Performance Measures and Executive Compensation | 62 | | SAY-ON-PAY VOTE | 65 | | PROPOSAL 2 ADVISORY APPROVAL OF EXECUTIVE COMPENSATION | 65 | | AUDIT COMMITTEE MATTERS | 66 | | PROPOSAL 3 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 66 | | Report of the Audit Committee | 67 | | Relationship with Independent Registered Public Accounting Firm | 68 | | STOCK OWNERSHIP INFORMATION | 69 | | Security Ownership of Certain Beneficial Owners and Management | 69 | | OTHER INFORMATION | 71 | | Where You Can Find More Information | 71 | | Stockholder Proposals and Nominations | 71 | | Other Matters | 72 | | Questions and Answers about the Annual Meeting | 72 | | Cautionary Note Regarding Forward-Looking Statements | 77 | | APPENDIX A | A-1 | | Non-GAAP Reconciliations | A-1 |

  2. Executive Compensation

    Executive Compensation The Management Development and Compensation (“MDC”) Committee of our Board carefully considers the feedback we receive from our stockholders through our engagement efforts, as well as the voting results on our advisory resolutions on executive compensation, when making executive compensation decisions. In response to this feedback, for 2023 the MDC Committee adopted refinements to its annual incentive framework for executive officers, which consists of a corporate scorecard of objective financial and risk metrics along with a qualitative assessment of individual performance. These enhancements included: ▪ Increasing the weighting of the Relative Tangible Economic Return metric such that it now accounts for more than 60% of the total scorecard value linked to financial metrics, with Operating Efficiency accounting for the remainder – Both such metrics had been equally-weighted in 2022 ▪ Replacing the Total Stockholder Return (“TSR”) governor, which had previously only capped the portion of the annual incentive award tied to Relative Tangible Economic Return, with an Absolute Tangible Economic Return modifier, which impacts overall annual incentive award opportunity, including the portion of the award tied to individual performance The MDC Committee believes that these compensation enhancements address the feedback we received from stockholders on our executive compensation program and serve to increase alignment between the interests of our stockholders and those of our executive officers.

  3. RECENT STOCKHOLDER ENGAGEMENT EFFORTS

    | What the Company Heard | What the Company Did | | Strengthen Annual Incentive Framework for Executives | ▪ Increased the weighting of the Relative Tangible Economic Return metric such that it now accounts for more than 60% of the total corporate scorecard value linked to financial metrics, with Operating Efficiency accounting for the remainder – Both such metrics had been equally-weighted in 2022 ▪ Replaced the TSR governor, which had previously only capped the portion of the annual incentive award tied to Relative Tangible Economic Return, with an Absolute Tangible Economic Return modifier, which impacts overall annual incentive award opportunity, including the portion of the award tied to individual performance | | Maintain Focus on Board Composition and Succession Planning | ▪ Added three highly qualified Independent Directors to our Board ▪ Conducted Board self-evaluation by way of individual Director interviews facilitated by a third-party governance expert ▪ Launched Board Chair succession planning process | | Advance Human Capital and ESG-Related Practices and Policies | ▪ Published a statement on human rights expressing our commitment to protect, preserve and promote human rights, as well as our belief that all people should be treated fairly and with respect ▪ Published Political Engagement and Contributions Policy that codifies our longstanding practice prohibiting the use of corporate funds for any political contributions or expenditures ▪ Supported seven employee-led networks, which collectively led over 50 DE&I activities throughout the year, including speakers, volunteerism, trainings and brown bag lunch discussions ▪ Conducted 25 training and development opportunities including a three-part training dedicated to fostering inclusive teams and relationships, reinforcing mindfulness around biases and reinforcing our corporate culture ▪ Coordinated over 25 volunteer activities with participation from over 70% of our employees ▪ Hosted interns in partnership with Project Destined, Girls Who Invest and Cristo Rey High School ▪ Published fourth annual ESG Report in June 2023, which: – Outlines the Company’s progress towards our ESG goals and commitments across our four key ESG areas: corporate governance, human capital, responsible investments and environment; and – Includes climate-related disclosures taking into consideration the recommendations of the Task Force on Climate-Related Financial Disclosures (“TCFD”) |

  4. Director Nominees

    Director Nominees

  5. Director Nominees

    | FRANCINE J. BOVICH | | Independent Director since 2014 | | COMMITTEES ▪ Management Development and Compensation ▪ Nominating/ Corporate Governance (Chair) | CAREER HIGHLIGHTS The Bradley Trusts ▪ Trustee (2011 to present) The BNY Mellon Family of Funds ▪ Board member, including serving on the board of a number of registered investment companies within the fund complex (2011 to present) Morgan Stanley Investment Management ▪ Managing Director (1993 to 2010) United Nations Investment Committee ▪ U.S. Representative, advising on a global portfolio of approximately $30 billion (1991 to 2005) | OTHER AFFILIATIONS ▪ Member of the Economic Club of New York ▪ Emeritus Trustee of Connecticut College EDUCATION ▪ B.A. in Economics, Connecticut College ▪ M.B.A. in Finance, New York University Stern School of Business | | | | DIRECTOR QUALIFICATION HIGHLIGHTS The Board believes that Ms. Bovich’s qualifications include her significant investment management experience and her experience serving as a trustee and board member. |

  6. Director Nominees

    | DAVID L. FINKELSTEIN | | Director since 2020 | | Chief Executive Officer & Chief Investment Officer | CAREER HIGHLIGHTS Annaly Capital Management, Inc. ▪ Chief Executive Officer (2020 to present) ▪ Chief Investment Officer (2022 to present) ▪ Chief Investment Officer, Agency and RMBS (2015 to 2020) ▪ Head of Agency Trading (2013 to 2015) Federal Reserve Bank of New York ▪ Officer in the Markets Group, where he was the primary strategist and policy advisor for the MBS purchase program (2009 to 2013) Salomon Smith Barney, Citigroup Inc. and Barclays PLC ▪ Held Agency MBS trading positions | OTHER AFFILIATIONS ▪ Vice Chair of the Treasury Markets Practice Group sponsored by the Federal Reserve Bank of New York ▪ Member of the Financial Sector Advisory Council of the Federal Reserve Bank of Dallas EDUCATION ▪ B.A. in Business Administration, the University of Washington ▪ M.B.A., the University of Chicago, Booth School of Business ▪ Holds the Chartered Financial Analyst® designation | | | | DIRECTOR QUALIFICATION HIGHLIGHTS The Board believes that Mr. Finkelstein’s qualifications include his deep expertise in fixed income investments, his experience serving as the Company’s Chief Executive Officer and Chief Investment Officer and his extensive markets and policy experience. |

  7. Director Nominees

    | THOMAS HAMILTON | | Independent Director since 2019 | | COMMITTEES ▪ Management Development and Compensation ▪ Nominating/ Corporate Governance ▪ Risk (Chair) | CAREER HIGHLIGHTS Construction Forms, Inc., an industrial manufacturing company ▪ Owner and Director (2013 to present) ▪ President and Chief Executive Officer (2013 to 2020) Barclays Capital (2004 to 2012) ▪ Strategic Advisor to the Global Head of Fixed Income, Currencies and Commodities in New York ▪ Global Head of Securitized Product Trading and Banking ▪ Head of Municipal Trading and Investment Banking | OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS ▪ Larimar Therapeutics, Inc. (NASDAQ: LRMR) OTHER AFFILIATIONS ▪ Co-Founder of the CureFA Foundation ▪ Director of the Friedreich’s Ataxia Research Alliance ▪ Chairman of the Board of Chondrial Therapeutics, Inc. (2013 to 2020) EDUCATION ▪ B.S. in Finance, the University of Dayton | | | | DIRECTOR QUALIFICATION HIGHLIGHTS The Board believes that Mr. Hamilton’s qualifications include his expertise in fixed income, mortgage-related assets, strategies and markets and significant leadership experience. |

  8. Director Nominees

    | KATHY HOPINKAH HANNAN, PhD, CPA | | Independent Director since 2019 | | COMMITTEES ▪ Audit (Chair) ▪ Management Development and Compensation ▪ Nominating/ Corporate Governance | CAREER HIGHLIGHTS KPMG, the U.S. member firm of the global audit, tax and advisory services firm KPMG International Limited ▪ Global Lead Partner, Senior Advisor for KPMG’s Board Leadership Center and National Leader Total Impact Strategy (2015 to 2018) ▪ National Managing Partner of Diversity and Corporate Responsibility (2009 to 2015) ▪ Midwest Area Managing Partner, Tax Services (2004 to 2009) ▪ Founder, the KPMG Women’s Advisory Board OTHER AFFILIATIONS ▪ Trustee of the Committee for Economic Development in Washington D.C. ▪ Active member of Women Corporate Directors ▪ Chairman of the Board & National President for Girl Scouts of the USA (2014 to 2020) ▪ Member of the National Advisory Council on Indian Education, serving under President George W. Bush | OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS ▪ Otis Elevator Co. (NYSE: OTIS) ▪ Ginkgo Bioworks (NYSE: DNA) EDUCATION ▪ B.A., Loras College ▪ Ph.D. in Leadership Studies, Benedictine University ▪ Graduate of the Chicago Management Institute at the University of Chicago, Booth School of Business ▪ Graduate of the Institute of Comparative Political & Economic Systems at Georgetown University ▪ Completed the Carnegie Mellon/NACD Cyber-Risk Oversight Program and the NACD Master Class: Cyber-Risk Oversight Program and earned the CERT Certificate in Cybersecurity Oversight and the NACD Directorship Certification | | | | DIRECTOR QUALIFICATION HIGHLIGHTS The Board believes that Dr. Hannan’s qualifications include her expertise in financial, tax and accounting matters as well as her significant experience in enterprise sustainability, corporate governance and organizational effectiveness. |

  9. Director Nominees

    | MICHAEL HAYLON | | Independent Director since 2008 | | Independent Chair of the Board COMMITTEES ▪ Nominating/ Corporate Governance ▪ Risk | CAREER HIGHLIGHTS Conning, Inc., a global provider of investment management solutions, services and research to the insurance industry ▪ Head of Conning North America (2018 to 2023) ▪ Managing Director (2012 to 2023) ▪ Head of Asset Management Sales, Products and Marketing (2014 to 2018) ▪ Head of Investment Products (2012 to 2014) General Re — New England Asset Management ▪ Head of Investment Product Management (2010 to 2011) Phoenix Companies, Inc. ▪ Chief Financial Officer (2004 to 2007) ▪ Executive Vice President and Chief Investment Officer (2002 to 2003) | OTHER AFFILIATIONS ▪ Prior member of the board of directors of Aberdeen Asset Management EDUCATION ▪ B.A., Bowdoin College ▪ M.B.A., the University of Connecticut | | | | DIRECTOR QUALIFICATION HIGHLIGHTS The Board believes that Mr. Haylon’s qualifications include his significant leadership and management experience from his years of management and oversight of large financial asset portfolios, his prior board experience with other companies and his expertise in financial matters. |

  10. Director Nominees

    | MARTIN LAGUERRE | | Independent Director since 2023 | | COMMITTEES ▪ Audit ▪ Corporate Responsibility | CAREER HIGHLIGHTS Warburg Pincus, a global private equity firm ▪ Senior Advisor to capital solutions, financial services and business services (2023 to present) Caisse de dépôt et placement du Québec (“CDPQ”) ▪ Executive Vice President and Global Head of Private Equity and Managing Director of Capital Solutions (2019 to 2022) CPP Investment Board (formerly CPPIB) ▪ Senior Principal (2016 to 2019) General Electric Power & Water ▪ Managing Director (2010 to 2016) IPG Photonics Corporation, DLJ, Credit Suisse and Lehman Brothers Investment Banking in New York ▪ Held various corporate roles | OTHER AFFILIATIONS ▪ Current board member of Kestra Holdings and Competitive Power Ventures ▪ Prior board member of BGC Partners (NASDAQ: BGCP) ▪ Representing CDPQ, previously served as a board member of Sagen MI Canada ▪ Representing CPP Investment Board, previously served as a board member of Cordelio Power Inc., Auren Energia SA (formerly Votorantim Energia), and a joint venture in select North American onshore renewable power assets of Enbridge Inc. EDUCATION ▪ Bachelor of Commerce, McGill University ▪ M.B.A., the University of Chicago, Booth School of Business ▪ Desautels’ Global Expert at McGill University’s Desautels Faculty of Management ▪ Holds the Chartered Financial Analyst® designation | | | | DIRECTOR QUALIFICATION HIGHLIGHTS The Board believes that Mr. Laguerre’s qualifications include his expertise in private equity, fixed income and investment banking, his prior board experience with other companies and his expertise in financial matters. |

  11. Director Nominees

    | MANON LAROCHE | | Independent Director since 2023 | | COMMITTEES ▪ Corporate Responsibility ▪ Risk | CAREER HIGHLIGHTS Citigroup Inc., a multinational investment bank and financial services firm ▪ Managing Director, Head of Global Spread Products Securitized Sales, North America (2018 to 2023) ▪ Head of Global Securitized Markets Sales, New York (2012 to 2018) ▪ Managing Director in Global Securitized Markets Sales (2002 to 2012) | EDUCATION ▪ B.S. in Applied Math and Economics, Brown University | | | | DIRECTOR QUALIFICATION HIGHLIGHTS The Board believes that Ms. Laroche’s qualifications include her expertise in Agency MBS, mortgages, fixed income, financing, repo, leverage and liquidity, as well as her experience working with a vast network of institutional investors. |

  12. Director Nominees

    | ERIC A. REEVES | | Independent Director since 2021 | | COMMITTEES ▪ Corporate Responsibility (Chair) ▪ Nominating/ Corporate Governance ▪ Risk | CAREER HIGHLIGHTS Prospect Park LLC, a full-service advisory and investment banking firm ▪ Founder and Chief Executive Officer (2023 to present) Duchossois Capital Management (“DCM”) ▪ Managing Director, Head of Private Capital Investments (2017 to 2023) The Duchossois Group ▪ Chief Administrative Officer (2017 to 2023) ▪ General Counsel & Secretary (2007 to 2023) McDermott, Will & Emery ▪ Law Partner Jones Day ▪ Corporate Attorney | OTHER AFFILIATIONS ▪ Former member of the boards of several DCM portfolio companies and funds ▪ Member of the Advisory Board of Ozinga Bros. ▪ Trustee at Rush University Medical Center and the National Philanthropic Trust ▪ Member of the Henry Crown Fellows at the Aspen Institute ▪ Honored as a Chicago United Business Leader of Color EDUCATION ▪ B.A., the University of Michigan ▪ J.D., the Ohio State University | | | | DIRECTOR QUALIFICATION HIGHLIGHTS The Board believes that Mr. Reeves’ qualifications include his expertise in sourcing, executing and managing private capital investments, his years of legal experience from serving as a general counsel and a law firm partner and his private company board experience. |

  13. Director Nominees

    | JOHN H. SCHAEFER | | Independent Director since 2013 | | COMMITTEES ▪ Audit ▪ Management Development and Compensation | CAREER HIGHLIGHTS Morgan Stanley, a multinational investment bank and financial services firm ▪ President and Chief Operating Officer of the Global Wealth Management division (2000 to 2005) ▪ Member of the Management Committee (1998 to 2005) ▪ Executive Vice President and Chief Strategic and Administrative Officer (1998 to 2000) ▪ Managing Director and Head of Strategic Planning and Capital Management (1997 to 1998) | OTHER AFFILIATIONS ▪ Board member and Chair of the Audit Committee of USI Holdings Corporation (2008 to 2012) EDUCATION ▪ B.B.A. in Accounting, the University of Notre Dame ▪ M.B.A., Harvard Business School | | | | DIRECTOR QUALIFICATION HIGHLIGHTS The Board believes that Mr. Schaefer’s qualifications include his broad financial services management experience, including management of strategic planning, capital management, human resources, internal audit and corporate communications, as well as his board and audit committee experience. |

  14. Director Nominees

    | GLENN A. VOTEK | | Director since 2019 Independent Director since 2023 | | COMMITTEES ▪ Corporate Responsibility ▪ Risk | CAREER HIGHLIGHTS Annaly Capital Management, Inc. ▪ Senior Advisor (March 2020 to August 2020) ▪ Interim Chief Executive Officer and President (November 2019 to March 2020) ▪ Chief Financial Officer (August 2013 to December 2019) CIT Group ▪ President of Consumer Finance (2012 to 2013) ▪ Executive Vice President and Treasurer (1999 to 2013) OTHER AFFILIATIONS ▪ Board member of the NACD New Jersey Chapter ▪ Former member of the Rutgers Business School Alumni Board for Learning Experiences | EDUCATION ▪ B.S. in Finance and Economics, Kean University/ the University of Arizona ▪ M.B.A. in Finance, Rutgers Business School ▪ Attended the Executive Education Program of the Colgate W. Darden Graduate School of Business Administration, the University of Virginia ▪ Completed the Carnegie Mellon/NACD Cyber-Risk Oversight Program and earned the CERT Certificate in Cybersecurity Oversight, the Diligent Institute Climate Leadership Certification, which focuses on oversight of climate risk and related business strategies, and the NACD Directorship Certification | | | | DIRECTOR QUALIFICATION HIGHLIGHTS The Board believes that Mr. Votek’s qualifications include his extensive knowledge of the Company’s operations and assets through his prior roles as the Company’s Interim Chief Executive Officer and President and Chief Financial Officer, his significant leadership experience and his financial and accounting expertise. |

  15. Director Nominees

    | SCOTT WEDE | | Independent Director since 2023 | | COMMITTEES ▪ Audit ▪ Risk | CAREER HIGHLIGHTS Conventus Holdings Corp., a provider of business purpose loans ▪ President and Chief Finance Officer (2022) Barclays Capital ▪ Global Head of Securitized Products and Municipal Finance (2004 to 2015) | OTHER AFFILIATIONS ▪ Member of the board of directors of MPOWER Financing (2021 to present) ▪ Member of the Advisory Board of INFLO (2020 to present) ▪ Member of the board of directors of Rapid Applications Group LLC (2016 to 2023) EDUCATION ▪ B.S. in Business Administration, Creighton University | | | | DIRECTOR QUALIFICATION HIGHLIGHTS The Board believes that Mr. Wede’s qualifications include his expertise in Agency MBS, mortgages, securitized products, risk management and the mortgage REIT sector. |

  16. Director Nominees

    | VICKI WILLIAMS | | Independent Director since 2018 | | COMMITTEES ▪ Management Development and Compensation (Chair) ▪ Nominating/ Corporate Governance | CAREER HIGHLIGHTS NBCUniversal, a multinational media conglomerate ▪ Chief Human Resources Officer (2018 to present) ▪ Senior Vice President, Compensation, Benefits and HRIS (2011 to 2018) Pay Governance LLC ▪ Partner Towers Perrin (now Willis Towers Watson) ▪ Principal | EDUCATION ▪ B.S. in Education with a concentration in mathematics education, with honors, the University of Georgia ▪ M.B.A. with a concentration in finance and quantitative statistics, with honors, the University of Georgia | | | | DIRECTOR QUALIFICATION HIGHLIGHTS The Board believes that Ms. Williams’ qualifications include her broad human resources, executive compensation and governance experience, including as Chief Human Resources Officer at a multinational company and as an external compensation consultant. |

  17. Compensation of Directors

    Compensation of Directors We compensate the Non-Employee Directors. Any Director who is also an executive officer or employee does not receive compensation for serving on the Board. The MDC Committee is responsible for reviewing, and recommending to the Board, the form and amount of compensation paid to the Non-Employee Directors. The annual compensation elements paid to the Non-Employee Directors for service on the Board and its standing committees for 2023 are set forth below:

  18. Compensation of Directors

    | 2023 Annual Non-Employee Director Fees | | |

  19. Compensation of Directors

    | Additional Cash Retainers for Board Service | Amount ($) | | Independent Board Chair | 115,000 | | Vice Chair | 10,000 | | Committee Member (all Board committees) | 10,000 | | Committee Chairs(1): | | | ▪ Audit | 25,000 | | ▪ MDC Committee | 20,000 | | ▪ All other Board committees | 15,000 |

  20. Compensation of Directors

    (1) Committee Chairs receive Committee Chair Retainers in addition to, and not in lieu of, Committee Member Retainers. Each DSU is equivalent in value to one share of our common stock. DSUs are granted on the date of the annual stockholder meeting and are fully vested as of the date of grant. DSUs settle in shares of common stock within 30 days following the first to occur of (i) the first anniversary of the grant date or (ii) the Director’s separation from service, and convert to shares of our common stock on the settlement date unless the Director elects to defer the settlement of the DSUs to a later date. DSUs do not have voting rights. DSUs pay dividend equivalents in either cash or additional DSUs at the election of the Director. Directors are also eligible to receive other stock-based awards under our 2020 Equity Incentive Plan, which includes a limit on the maximum total compensation payable to any Non-Employee Director. We reimburse the Directors for their reasonable out-of-pocket travel expenses incurred in connection with their attendance at full Board and Committee meetings.

  21. ROLE OF THE INDEPENDENT COMPENSATION CONSULTANT

    ROLE OF THE INDEPENDENT COMPENSATION CONSULTANT During 2023, the MDC Committee retained an independent compensation consultant, Frederic W. Cook & Co. (“F. W. Cook”), to assist the MDC Committee in its review of the compensation provided to the Non-Employee Directors. F. W. Cook provides market research and analyses on Director compensation programs and proposals, including reviews of competitive market trends and design practices and relevant peer and market benchmarking. The MDC Committee considered F. W. Cook’s independence in light of SEC regulations and NYSE listing standards. The MDC Committee discussed all relevant factors and concluded that no conflict of interest exists that would prevent F. W. Cook from independently representing the MDC Committee.

  22. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION The table below summarizes the compensation paid by the Company to the Non-Employee Directors for the fiscal year ended December 31, 2023.

  23. DIRECTOR COMPENSATION

    | Name | Fees Earned or Paid in Cash(1) ($) | Stock Awards(2) ($) | All Other Compensation ($) | Total ($) | | Francine J. Bovich | 140,000 | 155,000 | 0 | 295,000 | | Wellington J. Denahan(3) | 72,500 | 0 | 10,043(4) | 82,543 | | Thomas Hamilton | 141,250 | 155,000 | 0 | 296,250 | | Kathy Hopinkah Hannan | 155,000 | 155,000 | 0 | 310,000 | | Michael Haylon | 242,500 | 155,000 | 0 | 397,500 | | Martin Laguerre | 120,000 | 155,000 | 0 | 275,000 | | Manon Laroche | 30,000 | 155,000 | 0 | 185,000 | | Eric A. Reeves | 145,000 | 155,000 | 0 | 300,000 | | John H. Schaefer | 127,500 | 155,000 | 0 | 282,500 | | Glenn A. Votek | 120,000 | 155,000 | 10,043(4) | 296,626 | | Scott Wede | 30,000 | 155,000 | 0 | 185,000 | | Vicki Williams | 140,000 | 155,000 | 0 | 295,000 |

  24. DIRECTOR COMPENSATION

    (1) Fees earned or paid in cash may be prorated for partial year Board and/or Committee service. (2) The amounts in this column represent the aggregate grant date fair value of the DSU awards, which were granted to our Non-Employee Directors on May 17, 2023, are computed in accordance with FASB ASC Topic 718 and based on the closing price of the Company’s common stock on the date of grant. DSUs are vested at grant and accrue dividend equivalents as additional DSUs or cash at the election of the Director. (3) Ms. Denahan retired from the Board effective May 17, 2023. Represents the aggregate incremental cost to the Company for a Bloomberg terminal for the Director through May 17, 2023. EXECUTIVE OFFICERS The following table sets forth certain information with respect to the Company’s executive officers:

  25. DIRECTOR COMPENSATION

    | Name | Age | Title | | David L. Finkelstein | 51 | Chief Executive Officer and Chief Investment Officer | | Serena Wolfe | 44 | Chief Financial Officer | | Steven F. Campbell | 52 | President and Chief Operating Officer | | Anthony C. Green | 49 | Chief Corporate Officer, Chief Legal Officer and Secretary |

  26. DIRECTOR COMPENSATION

    Biographical information on Mr. Finkelstein is provided above under the heading “Election of Directors.”

  27. DIRECTOR COMPENSATION

    | SERENA WOLFE | | | | | CAREER HIGHLIGHTS Annaly Capital Management, Inc. ▪ Chief Financial Officer (December 2019 to present) Ernst & Young LLP (“EY”) ▪ Partner and Central Region Real Estate Hospitality & Construction (“RHC”) Leader, managing the go-to-market efforts and client relationships across the sector (2017 to 2019) ▪ Global RHC Assurance Leader (2017 to 2019) ▪ Partner (2011 to 2017) ▪ Practiced with EY for over 20 years, including six years with EY Australia and 16 years with the U.S. practice | OTHER PUBLIC COMPANY BOARD SERVICE ▪ Lennar Corporation (NYSE: LEN) ▪ Doma Holdings, Inc. (NYSE: DOMA) EDUCATION ▪ Bachelor of Commerce in Accounting, the University of Queensland ▪ Certified Public Accountant in the states of New York and California |

  28. DIRECTOR COMPENSATION

    | STEVEN F. CAMPBELL | | | | | CAREER HIGHLIGHTS Annaly Capital Management, Inc. ▪ President (December 2020 to present) ▪ Chief Operating Officer (June 2020 to present) ▪ Head of Business Operations (2019 to June 2020) ▪ Head of Credit Operations and Enterprise Risk (2018 to 2019) ▪ Chief Operating Officer of Annaly Commercial Real Estate Group (2016 to 2018) ▪ Head of Credit Strategy (2015 to 2018) Fortress Investment Group LLC ▪ Held various roles over six years, including serving as Managing Director in the Credit Funds business | OTHER AFFILIATIONS ▪ Member of the Advisory Board for the Fitzgerald Institute of Real Estate at the University of Notre Dame EDUCATION ▪ B.B.A., the University of Notre Dame ▪ M.B.A., the University of Chicago, Booth School of Business |

  29. DIRECTOR COMPENSATION

    | ANTHONY C. GREEN | | | | | CAREER HIGHLIGHTS. Annaly Capital Management, Inc. ▪ Chief Corporate Officer, Chief Legal Officer and Secretary (January 2019 to present) ▪ Chief Legal Officer and Secretary (2017 to 2019) ▪ Deputy General Counsel (2009 to 2017) K&L Gates ▪ Law Partner in the Corporate, Securities, Mergers & Acquisitions Group | EDUCATION ▪ B.A. in Economics and Political Science, the University of Pennsylvania ▪ J.D. and LL.M. in International and Comparative Law, Cornell Law School |

  30. DIRECTOR COMPENSATION

    This Compensation Discussion and Analysis describes the key features of our executive compensation program and the MDC Committee’s approach in deciding compensation for our NEOs for their performance in 2023, and is divided into four topics: (1) Executive Summary, (2) How Executive Compensation Decisions are Made, (3) Executive Compensation Design and Award Decisions for 2023 and (4) Executive Compensation Policies.

  31. CONTENTS

    | 2023 Annual Incentives — Cash and Equity Awards | 43 | | 2023 Annual Incentives — Corporate/Organizational Performance | 44 | | 2023 Annual Incentives — Individual Performance | 46 | | 2023 Annual Incentives — Absolute Tangible Economic Return Modifier | 48 | | Payout of PSUs Granted in 2021 | 51 | | Dividend Equivalents on RSUs and PSUs | 52 | | Other Compensation | 52 | | Severance Arrangements | 52 | | 4. EXECUTIVE COMPENSATION POLICIES | 52 | | Stock Ownership Guidelines | 52 | | Clawback Policies | 52 | | Prohibition on Hedging Company Securities | 53 | | Prohibition on Pledging Company Securities | 53 | | Risks Related to Compensation Policies and Practices | 53 | | REPORT OF THE COMPENSATION COMMITTEE | 53 |

  32. STOCKHOLDER FEEDBACK ON EXECUTIVE COMPENSATION AND CHANGES TO OUR PROGRAM

    STOCKHOLDER FEEDBACK ON EXECUTIVE COMPENSATION AND CHANGES TO OUR PROGRAM At our 2023 Annual Meeting, over 88% of the votes cast were in favor of the Say-on-Pay vote. The MDC Committee carefully reviewed these voting results, along with additional feedback from our stockholder engagement efforts, when making executive compensation decisions. Since the beginning of 2023, we initiated outreach to 100% of our top 100 institutional investors and had conversations with investors representing approximately 90% of outstanding shares held by our 10 largest stockholders. Feedback confirms that most of our stockholders strongly support our executive compensation program, including the changes and enhancements we have made over the last few years. During these conversations, some stockholders noted that, for 2022, the MDC Committee had determined to apply its discretion to reduce total NEO incentive amounts to slightly below the amounts provided for by the Company’s more formulaic annual incentive framework in order to address the Company’s stock market performance and to increase alignment between the NEOs and our stockholders. In response to this feedback, for 2023, the MDC Committee adopted refinements to its annual incentive framework, which consists of a corporate scorecard of objective financial and risk metrics (which accounts for 75% of the total scorecard value) along with a qualitative assessment of individual performance (which accounts for 25% of the total scorecard value). For 2022, the corporate scorecard utilized two equally-weighted financial metrics: (1) Relative Tangible Economic Return with an Absolute TSR governor; and (2) Operating Efficiency. For 2023, the MDC Committee determined to increase the weighting of the Relative Tangible Economic Return metric such that it now accounts for more than 60% of the total scorecard value linked to financial metrics, with Operating Efficiency accounting for the remainder. In addition, the MDC Committee determined to replace the TSR governor, which had previously only capped the portion of the annual incentive award tied to Relative Tangible Economic Return, with an Absolute Tangible Economic Return modifier, which impacts overall annual incentive award opportunity, including the portion of the award tied to individual performance. Evolution of Annual Incentive Framework from 2022 to 2023 The MDC Committee back-tested the NEO compensation determinations for 2022 performance using the revised annual incentive framework developed for 2023 and noted that the amounts produced under the new framework were consistent with the amounts actually awarded for 2022 performance, inclusive of the MDC Committee’s discretionary reduction. Based on our conversations with investors, we believe these enhancements for 2023 appropriately address stockholder feedback, including the goal of achieving stronger alignment between the interests of our stockholders and those of our NEOs. The MDC Committee will continue to consider the outcome of future Say-on-Pay votes, as well as stockholder feedback received throughout the year, and invites stockholders to express their views to the MDC Committee as described under “Communications with the Board.”

  33. COMPONENTS OF EXECUTIVE COMPENSATION

    | 2023 Compensation Element | | | Objectives | Key Measures | Governance Principles | | ◀ FIXED ▶ | Short- Term | BASE SALARY | ▪ Provide a level of fixed pay appropriate to NEO’s roles and responsibilities | ▪ Experience, duties and scope of responsibilities ▪ Internal and external market factors | ▪ Comprises minority of overall compensation opportunity compared to “at risk” pay | | ◀ AT RISK / VARIABLE ▶ | | ANNUAL CASH INCENTIVES | ▪ Provide a market competitive annual cash incentive opportunity ▪ Incentivize and reward superior Company and individual performance | ▪ Considers achievement of financial, risk and other operational performance measures for the performance year | ▪ No guaranteed minimum award amounts ▪ Maximum award value of 120% of target(1) | | | Long- Term | LONG-TERM INCENTIVES | ▪ Align NEO’s interests with long-term stockholder interests ▪ Encourage long-term, sustainable performance results ▪ Support retention of key talent | ▪ Award amounts included as part of annual incentive and, as such, consider achievement of financial, risk and other operational performance measures for the performance year ▪ Restricted stock units (“RSUs”) vest based on continued service and provide both retention and stock value accumulation incentives ▪ Performance share units (“PSUs”) vest based on achievement of multiple rigorous Company performance metrics over a three-year performance period | ▪ No guaranteed minimum award amounts ▪ Maximum award value of 120% of target at grant ▪ PSUs have a maximum award payout of 150% of grant ▪ Equally-weighted mix of PSUs and RSUs |

  34. STOCKHOLDER OUTREACH AND RESULTS OF 2023 SAY-ON-PAY VOTE

    | | What the Company Does | | What the Company Does Not Do | | ▪ Majority of compensation is “at risk” — for 2023, variable performance-based compensation comprised 94% of the CEO’s total compensation and 86% of the other NEOs’ total compensation(1) ▪ MDC Committee applied a corporate scorecard reflecting both objective financial and non-financial goals (75% weighting) and individual achievements (25% weighting) in determining total incentive awards for 2023 ▪ Multiple performance metrics — diversified mix of rigorous Company performance metrics, including tangible economic return and earnings available for distribution (“EAD”) return on equity ▪ Relative performance metrics require above median (55%+) performance to achieve target payouts ▪ Two clawback policies for NEOs: one that covers financial restatements and a second for misconduct ▪ All NEOs are subject to robust stock ownership requirements and holding restrictions ▪ Annual assessment of NEO compensation practices against peer companies and best practices ▪ Annual compensation risk assessment to ensure compensation program does not encourage excessive risk-taking ▪ Regular stockholder feedback through robust outreach program | | ▪ No minimum guaranteed bonus amounts ▪ No guaranteed salary increases ▪ No severance benefits paid to an executive other than in connection with their involuntary termination of employment by the Company without “cause” ▪ No enhanced cash severance for terminations in connection with a change in control ▪ No NEO severance payments and benefits exceeding 2.99 times salary and bonus ▪ No “single trigger” cash severance or automatic vesting of equity awards based solely upon a change in control of the Company ▪ No excessive perquisites ▪ No tax gross-ups for change in control excise taxes or on any executive perquisites, other than for non-cash relocation benefits ▪ No hedging or pledging of Company stock ▪ No dividends or dividend equivalents on unvested awards paid unless and until the underlying awards are earned and vested ▪ No repricing of options or stock appreciation rights (“SARs”) or the exchange of underwater options or SARs for cash or other awards without stockholder approval ▪ No supplemental executive retirement plans | |

  35. TOTAL DIRECT COMPENSATION TABLE

    TOTAL DIRECT COMPENSATION TABLE The following table supplements the Summary Compensation Table on page 54 and shows the total direct compensation paid or awarded to each NEO for 2023, 2022 and 2021. The table below is not a substitute for the required information included in the Summary Compensation Table; however, the MDC Committee believes it best aligns with how the MDC Committee views executive compensation for a given performance year. In accordance with SEC rules, the Summary Compensation Table includes the grant date fair value of stock awards in the year granted, even if the grant is based on a review of prior year performance. As discussed in more detail below, the RSU and PSU awards granted in early 2023 for performance in 2022 are included in the Summary Compensation Table but not in the Total Direct Compensation Table; conversely, the RSU and PSU awards granted in early 2024 for performance in 2023 are included in the Total Direct Compensation Table but not in the Summary Compensation Table.

  36. Summary Compensation Table

    Summary Compensation Table The following Summary Compensation Table provides information concerning the compensation of our NEOs paid or awarded during the fiscal year ended December 31, 2023 and the prior two fiscal years. As explained in the Compensation Discussion and Analysis above, the NEOs were also awarded RSUs and PSUs as part of their total annual incentive award for 2023 performance, but because those equity awards were granted in early 2024, in accordance with SEC rules they do not appear in this year’s Summary Compensation Table; however, in order to provide a complete picture of compensation paid or awarded to NEOs for service in 2023, these awards are included in the Total Direct Compensation Table on page 39 of this Proxy Statement, which is intended to supplement the Summary Compensation Table. Please see the Compensation Discussion and Analysis above for a full discussion as to how the MDC Committee determined cash and equity awards for the NEOs linked to Company and individual performance for 2023.

  37. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Award(1) ($) | All Other Compensation ($) | Total ($) | | David L. Finkelstein Chief Executive Officer, Chief Investment Officer and Director | 2023 | 1,000,000 | 7,328,100 | 6,984,000 | 15,200(2) | 15,327,300 | | | 2022 | 1,000,000 | 5,984,000 | 7,324,950 | 14,732 | 14,323,682 | | | 2021 | 1,000,000 | 6,325,000 | 1,800,001 | 13,763 | 9,138,764 | | Serena Wolfe Chief Financial Officer | 2023 | 750,000 | 2,348,400 | 1,781,232 | 14,250(3) | 4,893,882 | | | 2022 | 750,000 | 1,781,250 | 749,992 | 13,032 | 3,294,274 | | | 2021 | 750,000 | 3,000,000 | 399,999 | 12,363 | 4,162,362 | | Steven F. Campbell(4) President and Chief Operating Officer | 2023 | 750,000 | 2,739,800 | 1,828,704 | 15,200(2) | 5,333,704 | | | 2022 | 750,000 | 1,828,750 | 1,799,961 | 14,732 | 4,393,443 | | | 2021 | — | — | — | — | — | | Anthony C. Green Chief Corporate Officer, Chief Legal Officer and Secretary | 2023 | 750,000 | 2,035,300 | 1,781,232 | 15,200(2) | 4,581,732 | | | 2022 | 750,000 | 1,781,250 | 1,874,948 | 14,732 | 4,420,930 | | | 2021 | 750,000 | 1,875,000 | 1,100,000 | 13,763 | 3,738,763 |

  38. Summary Compensation Table

    (1) These amounts equal the aggregate grant date fair value of stock awards, inclusive of RSUs and/or PSUs, granted during the applicable fiscal year. The grant date fair value of RSUs was determined based on the closing price of the Company’s common stock on the grant date. The grant date fair value of PSUs with performance conditions was determined based on the closing price of the Company’s common stock on the grant date assuming a probable outcome that the PSUs would become earned at target. Assuming the maximum level of performance, the grant date fair value of the stock awards granted during 2023 would be:

  39. Summary Compensation Table

    | Name | Grant Date Fair Value | | David L. Finkelstein | $8,515,388 | | Serena Wolfe | $2,171,800 | | Steven F. Campbell | $2,229,676 | | Anthony C. Green | $2,171,800 |

  40. Summary Compensation Table

    For more information about the assumptions used for determining the grant date fair value of the NEOs’ equity awards, see Note 16, “Long-Term Stock Incentive Plan,” of Notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. (2) Includes Company-paid group excess liability insurance premiums ($3,000) and Company matching contributions to the Company’s 401(k) plan ($12,200). (3) Includes Company-paid group excess liability insurance premiums ($3,000) and Company matching contributions to the Company’s 401(k) plan ($11,250). Mr. Campbell was not an NEO in 2021.

  41. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table summarizes certain information regarding all plan-based awards granted to the NEOs during the year ended December 31, 2023. See “2023 Annual Incentives — Cash and Equity Awards” in the Compensation Discussion and Analysis above for a description of the plan-based awards.

  42. Grants of Plan-Based Awards

    | Name | Grant Date | Type of Award | Estimated Future Payouts Under Equity Incentive Plan Awards (# of Shares of Common Stock)(1) | | | All Other Stock Awards: Number of Shares of Stock(2) (#) | Grant Date Fair Value of Stock Awards(3) ($) | | | | | Threshold (#) | Target (#) | Maximum (#) | | | | David L. Finkelstein | 2/01/2023 | RSU | 0 | 0 | 0 | 145,500 | 3,492,000 | | | 2/01/2023 | PSU | 36,375 | 145,500 | 218,250 | 0 | 3,492,000 | | Serena Wolfe | 2/01/2023 | RSU | 0 | 0 | 0 | 37,109 | 890,616 | | | 2/01/2023 | PSU | 9,277 | 37,109 | 55,664 | 0 | 890,616 | | Steven F. Campbell | 2/01/2023 | RSU | 0 | 0 | 0 | 38,098 | 914,352 | | | 2/01/2023 | PSU | 9,525 | 38,098 | 51,147 | 0 | 914,352 | | Anthony C. Green | 2/01/2023 | RSU | 0 | 0 | 0 | 37,109 | 890,616 | | | 2/01/2023 | PSU | 9,277 | 37,109 | 55,664 | 0 | 890,616 |

  43. Grants of Plan-Based Awards

    (1) Amounts represent the number of shares to be earned at threshold, target and maximum performance (before dividend equivalents) for the PSUs granted in early 2023 based on 2022 performance. For additional details about these PSUs, see “2022 Annual Incentives — Grant of PSUs” in the Compensation Discussion and Analysis included in the Company’s proxy statement filed in April 2023. (2) Amounts represent the number of RSUs granted in early 2023 based on 2022 performance. For additional details about these PSUs, see “2022 Annual Incentives — Grant of RSUs” in the Compensation Discussion and Analysis included in the Company’s proxy statement filed in April 2023. See Footnote 1 to the Summary Compensation Table for additional information on how the grant date fair value for these awards was determined.

  44. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End The following table summarizes the value and number of shares underlying the outstanding equity awards held by the NEOs as of December 31, 2023. All market or payout values in the table shown for stock awards are based on the closing price of the Company’s common stock on December 29, 2023 of $19.37 per share.

  45. Outstanding Equity Awards at Fiscal Year-End

    | | Stock Awards | | | | | | Name | Grant Date | Number of Shares or Units of Stock that Have Not Vested(1)(2) (#) | Market Value of Shares or Units of Stock that Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested(2)(3) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($) | | David L. Finkelstein | 2/1/2021 | 26,360 | 510,602 | 0 | 0 | | | 2/1/2022 | 99,633 | 1,929,896 | 0 | 0 | | | 2/1/2022 | 0 | 0 | 224,179 | 4,342,341 | | | 2/1/2023 | 161,552 | 3,129,268 | 0 | 0 | | | 2/1/2023 | 0 | 0 | 242,328 | 4,693,903 | | Serena Wolfe | 2/1/2021 | 4,392 | 85,069 | 0 | 0 | | | 2/1/2022 | 10,000 | 197,578 | 0 | 0 | | | 2/1/2022 | 0 | 0 | 22,953 | 444,604 | | | 2/1/2023 | 41,203 | 798,103 | 0 | 0 | | | 2/1/2023 | 0 | 0 | 61,805 | 1,197,155 | | Steven F. Campbell | 2/1/2021 | 6,589 | 127,631 | 0 | 0 | | | 2/1/2022 | 25,502 | 474,235 | 0 | 0 | | | 2/1/2022 | 0 | 0 | 57,381 | 1,111,474 | | | 2/1/2023 | 41,203 | 819,373 | 0 | 0 | | | 2/1/2023 | 0 | 0 | 63,452 | 1,229,060 | | Anthony C. Green | 2/1/2021 | 9,518 | 184,355 | 0 | 0 | | | 2/1/2022 | 25,502 | 493,978 | 0 | 0 | | | 2/1/2022 | 0 | 0 | 71,155 | 1,378,266 | | | 2/1/2023 | 41,203 | 798,103 | 0 | 0 | | | 2/1/2023 | 0 | 0 | 61,805 | 1,197,155 |

  46. Outstanding Equity Awards at Fiscal Year-End

    (1) Represents the aggregate number of RSUs (including additional RSUs accrued as dividend equivalents), which vest in equal installments over three years starting on the first anniversary of the grant date, generally subject to continued employment, as set forth below:

  47. Outstanding Equity Awards at Fiscal Year-End

    | Grant Date | Remaining Vesting Date(s) | | 2/1/2021 | February 1, 2024 | | 2/2/2022 | February 1, 2024 and 2025 | | 2/1/2023 | February 1, 2024, 2025 and 2026 |

  48. Outstanding Equity Awards at Fiscal Year-End

    (2) We completed a 1-for-4 reverse stock split of our outstanding common stock on September 23, 2022. Number of shares of common stock in this table reflect the number of shares of common stock after giving effect to the reverse stock split. Based on the performance through the end of 2023, the number of PSUs shown in the table assumes maximum (150%) payouts for 2022 and 2023 PSU grants and includes additional PSUs accrued as dividend equivalents. The PSUs are subject to cliff vesting following the end of the three-year performance period.

  49. Stock Vested in 2023

    Stock Vested in 2023 The following table sets forth certain information with respect to our NEOs regarding stock vested during the year ended December 31, 2023.

  50. Stock Vested in 2023

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting(1) (#) | Value Realized on Vesting(2) ($) | | David L. Finkelstein | 116,056 | 2,587,258 | | Serena Wolfe | 14,228 | 313,099 | | Steven F. Campbell | 23,876 | 542,946 | | Anthony C. Green | 55,095 | 1,162,358 |

  51. Stock Vested in 2023

    (1) Reflects previously granted PSU and RSU awards vesting during the fiscal year and related earned dividends (before any taxes were withheld). (2) Reflects fair value of vested shares using closing price of our common stock on the applicable date of vesting (before any taxes were withheld). Certain awards that vested during 2023 may be paid during 2024, when performance results were certified or as the result of certain payment delays required by U.S. tax laws.

  52. Pension Benefits and Nonqualified Deferred Compensation

    Pension Benefits and Nonqualified Deferred Compensation We did not provide the NEOs with any benefits pursuant to defined benefit plans and nonqualified deferred compensation plans during 2023. Our only retirement plan in which the NEOs were eligible to participate is the 401(k) plan, which is a tax-qualified defined contribution retirement plan that is generally available to all employees on a non-discriminatory basis, and includes an opportunity to receive employer matching contributions up to 4% of eligible pay in 2023 (subject to limits set forth in the Internal Revenue Code). Such matching contributions are immediately vested.

  53. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control The current active NEOs are eligible to participate in an Executive Severance Plan, which we adopted effective July 1, 2020. The Executive Severance Plan provides benefits upon a participant’s involuntary termination of employment by the Company without “cause” (as such term is defined therein), subject to the participant’s execution of a general release of claims in favor of the Company and its affiliates. Severance benefits are payable in a lump sum and are calculated based on the participant’s title, base salary and average or target cash bonus (depending on the year of termination), as described below. “Cause” generally means any of the following: (i) the commission of an act of fraud or dishonesty in the course of employment; (ii) a conviction or plea of no contest to a felony or crime of comparable magnitude under applicable law; (iii) a failure to perform job duties where such failure is materially injurious to the Company and its affiliates, or to the business interests or reputation of the Company and its affiliates; (iv) a material breach of any written policy applicable to the NEO including, but not limited to, the Company’s Code of Conduct; or (v) a material breach of any employment-related covenants under any agreement with the Company or an affiliate. If the CEO had an involuntary termination of employment without cause (other than by reason of death or disability), the CEO would be eligible to receive severance benefits in an amount equal to the sum of (i) 1.5 times the CEO’s annual base salary and (ii) 1.5 times the CEO’s target cash bonus for the plan year in which the involuntary termination of employment occurs. If any other NEO participating in the Executive Severance Plan had an involuntary termination of employment without cause (other than by reason of death or disability), the other NEO would be eligible to receive severance benefits in an amount equal to the sum of (i) 1.25 times the other NEO’s annual base salary and (ii) 1.25 times the other NEO’s target cash bonus for the plan year in which the involuntary termination of employment occurs. In addition, a participant who experiences an involuntary termination of employment without cause (other than by reason of death or disability) after March 31st of a calendar year will be eligible to receive a prorated cash bonus payment based on the amount of the participant’s cash bonus earned for the prior year (subject to the Company’s discretion to adjust the cash bonus amount for performance in the current year). The Executive Severance Plan provides that severance may be recovered if the Company determines within three years after a participant’s separation date that they engaged in conduct that constitutes “Detrimental Conduct” under our Misconduct Clawback Policy. For additional information, see “Clawback Policies” in the Compensation Discussion and Analysis above.

  54. QUANTIFICATION OF TERMINATION PAYMENTS

    | Name | Potential Payments | Termination by Company Without Cause (Other than within Two Years of Change in Control) ($) | Termination by Company Without Cause (within Two Years of a Change in Control) ($) | Death ($) | Disability ($) | Termination by Company for Cause or Voluntary Termination by Executive (with or without Good Reason) ($) | | David L. Finkelstein | Severance | 12,000,000 | 12,000,000 | 0 | 0 | 0 | | | Bonus | 7,328,100 | 7,328,100 | 0 | 0 | 0 | | | Accelerated Equity Awards(1) | 0 | 13,882,287 | 11,593,929 | 5,569,766 | 0 | | | Benefits | 0 | 0 | 0 | 0 | 0 | | | TOTAL | 19,328,100 | 33,210,387 | 11,593,929 | 5,569,766 | 0 | | Serena Wolfe | Severance | 3,750,000 | 3,750,000 | 0 | 0 | 0 | | | Bonus | 2,348,400 | 2,348,400 | 0 | 0 | 0 | | | Accelerated Equity Awards(1) | 0 | 2,648,408 | 2,175,256 | 1,080,751 | 0 | | | Benefits | 0 | 0 | 0 | 0 | 0 | | | TOTAL | 6,098,400 | 8,746,808 | 2,175,256 | 1,080,751 | 0 | | Steven F. Campbell | Severance | 4,218,750 | 4,218,750 | 0 | 0 | 0 | | | Bonus | 2,739,800 | 2,739,800 | 0 | 0 | 0 | | | Accelerated Equity Awards(1) | 0 | 3,539,485 | 2,951,961 | 1,421,240 | 0 | | | Benefits | 0 | 0 | 0 | 0 | 0 | | | TOTAL | 6,958,550 | 10,498,035 | 2,951,961 | 1,421,240 | 0 | | Anthony C. Green | Severance | 3,375,000 | 3,375,000 | 0 | 0 | 0 | | | Bonus | 2,035,300 | 2,035,300 | 0 | 0 | 0 | | | Accelerated Equity Awards(1) | 0 | 3,599,819 | 3,015,521 | 1,476,435 | 0 | | | Benefits | 0 | 0 | 0 | 0 | 0 | | | TOTAL | 5,410,300 | 9,010,119 | 3,015,521 | 1,476,435 | 0 |

  55. CEO Pay Ratio

    CEO Pay Ratio As required by applicable SEC rules, we are providing the following information about the relationship of the annual total compensation of our median employee to the annual total compensation of Mr. Finkelstein, the Company’s Chief Executive Officer and Chief Investment Officer. For 2023, our last completed fiscal year: ▪ the annual total compensation of our median employee was $294,000, and ▪ the annual total compensation of the CEO as reported in the Summary Compensation Table included in this Proxy Statement was $15,327,300. Based on this information, for 2023 the CEO’s annual total compensation was 52 times that of the annual total compensation of our median employee. We took the following steps to identify our median employee, as well as to determine the annual total compensation of our median employee and our CEO. The required CEO pay ratio information reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on the methodologies and assumptions described above. SEC rules for identifying the median employee and determining the CEO pay ratio permit companies to employ a wide range of methodologies, estimates and assumptions. As a result, the CEO pay ratios reported by other companies, which may have employed other permitted methodologies or assumptions and which may have a significantly different work force structure from us, are likely not comparable to our SEC-required or supplemental CEO pay ratios.

  56. Pay Versus Performance

    Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company. The following table sets forth the compensation for our Principal Executive Officers (the “PEOs”) and the average compensation for our other NEOs (the “Non-PEO NEOs”), both as reported in the Summary Compensation Table on page 54 of this Proxy Statement and with certain adjustments to reflect the “compensation actually paid” to such individuals, as defined under SEC’s pay versus performance disclosure rules, for each of 2023, 2022, 2021 and 2020. The following table also provides information on our cumulative TSR, the cumulative TSR of our peer group, Net Income and Tangible Economic Return. For further information concerning our variable pay-for-performance philosophy and how we align executive compensation with our performance, refer to the Compensation Discussion and Analysis section of this Proxy Statement.

  57. Pay Versus Performance

    | (a) | (b) | | (c) | | (d) | (e) | (f) | (g) | (h) | (i) | | | Summary Compensation Table Total for PEOs(1) | | Compensation Actually Paid to PEOs(4) | | Average Summary Compensation Table Total for Non-PEO NEOs(5) ($) | Average Compensation Actually Paid to Non-PEO NEOs(6) ($) | Value of Initial Fixed $100 Investments Based on: | | GAAP Net Income ($000s)(9) ($) | Tangible Economic Return(10) (%) | | Year | D. Finkelstein(2) ($) | G. Votek(3) ($) | D. Finkelstein(2) ($) | G. Votek(3) ($) | | | TSR(7) ($) | Peer Group TSR(8) ($) | | | | 2023(11) | 15,327,300 | 0 | 16,790,236 | 0 | 4,936,439 | 5,299,208 | 86.79 | 79.21 | (1,638,457) | 6.1 | | 2022 | 14,323,682 | 0 | 11,087,169 | 0 | 5,420,097 | 4,916,762 | 82.75 | 69.20 | 1,726,420 | (23.7) | | 2021 | 9,138,764 | 0 | 9,511,494 | 0 | 3,882,162 | 4,027,576 | 105.00 | 91.50 | 2,396,280 | 0.1 | | 2020 | 12,703,778 | 2,070,906 | 16,250,879 | 1,761,597 | 3,835,068 | 3,994,675 | 102.43 | 77.80 | (889,772) | 1.6 |

  58. Pay Versus Performance

    (1) The dollar amounts reported in column (b) are the amounts of total compensation reported for Mr. Finkelstein for each corresponding year in the “Total” column of the Summary Compensation Table. (2) Mr. Finkelstein has served as our CEO since March 2020. (3) Mr. Votek served as our Interim CEO until March 2020. (4) The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Messrs. Finkelstein and Votek, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Messrs. Finkelstein and Votek during the applicable year. The Company does not sponsor any defined benefit or pension plans, so pension benefit adjustments have not been reflected. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Finkelstein’s total compensation for each year to determine the compensation actually paid:

  59. Pay Versus Performance

    | Year | Reported Summary Compensation Table Total ($) | Reported Value of Equity Awards(a) ($) | Adjusted Equity Value(b) ($) | Compensation Actually Paid ($) | | 2023 | 15,327,300 | (6,984,000) | 8,446,936 | 16,790,236 | | 2022 | 14,323,682 | (7,324,950) | 4,088,437 | 11,087,169 | | 2021 | 9,138,764 | (1,800,001) | 2,172,731 | 9,511,494 | | 2020 | 12,703,778 | (5,000,006) | 8,547,107 | 16,250,879 |

  60. Pay Versus Performance

    (a) The reported value of equity awards represents the amount reported in the “Stock Awards” column in the Summary Compensation Table for the applicable year. (b) The adjusted equity value for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in the same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value;

  61. (vi)

    | Year | Reported Summary Compensation Table Total ($) | Reported Value of Equity Awards ($) | Equity Award Adjustments(c) ($) | Compensation Actually Paid ($) | | 2020 | 2,070,906 | (999,999) | 690,690 | 1,761,597 |

  62. Relationship Between Financial Performance Measures and Compensation Actually Paid

    Relationship Between Financial Performance Measures and Compensation Actually Paid While we utilize several performance measures to align executive compensation with Company performance, all of those Company measures are not presented in the Pay Versus Performance table above. Moreover, we generally seek to incentivize long-term performance, and therefore do not specifically align our performance measures with compensation that is actually paid (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In addition, any alignment between compensation actually paid and our performance measures is impacted by the fact that we pay annual cash incentives and award annual equity incentives for a particular performance year early in the subsequent year, and compensation actually paid for a particular performance year includes annual cash incentives paid in respect of such performance year regardless of when paid, but excludes equity incentives awarded in respect of such performance year unless granted during such performance year. This timing issue was particularly amplified in 2021, as Mr. Finkelstein received a one-time equity award upon the completion of our management internalization transaction in June 2020; however, such award was considered by the MDC Committee as part of Mr. Finkelstein’s total annual incentive compensation for 2020 and essentially reduced the 2020 equity incentive award that would otherwise have been awarded to him in early 2021 for performance in the prior year. In order to present more complete information on how the MDC Committee views executive compensation for a given performance year, regardless of when paid, we annually disclose a Total Direct Compensation Table. In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table.

  63. COMPENSATION ACTUALLY PAID AND CUMULATIVE TSR

    COMPENSATION ACTUALLY PAID AND CUMULATIVE TSR

  64. COMPENSATION ACTUALLY PAID AND CUMULATIVE TSR

    | The graph to the right presents the relationship between the amount of compensation actually paid (“CAP”) to our PEO, Mr. Finkelstein, and the average amount of CAP to the Non-PEO NEOs with our cumulative TSR over 2020, 2021, 2022 and 2023. In 2020, we had two PEOs, Mr. Finkelstein and Mr. Votek, as shown in the table above, and the graph to the right shows the CAP to each PEO for 2020. As described in the Compensation Discussion and Analysis, we utilize an Absolute Tangible Economic Return modifier, which impacts overall incentive award opportunity. |

  65. COMPENSATION ACTUALLY PAID AND GAAP NET INCOME

    COMPENSATION ACTUALLY PAID AND GAAP NET INCOME

  66. COMPENSATION ACTUALLY PAID AND GAAP NET INCOME

    | The graph to the left presents the relationship between the amount of CAP to our PEO, Mr. Finkelstein, and the average amount of CAP to the Non-PEO NEOs with our GAAP net income for 2020, 2021, 2022 and 2023. In 2020, we had two PEOs, Mr. Finkelstein and Mr. Votek, as shown in the table above, and the graph to the left shows the CAP to each PEO for 2020. While we do not use GAAP net income as a performance measure in the overall executive compensation program, we use a non-GAAP adjusted earnings-linked measure (Average EAD Return on Equity) to determine 50% of PSU award payouts. For a reconciliation of EAD to GAAP net income, please refer to the Appendix. |

  67. COMPENSATION ACTUALLY PAID AND TANGIBLE ECONOMIC RETURN

    COMPENSATION ACTUALLY PAID AND TANGIBLE ECONOMIC RETURN The graph to the right presents the relationship between the amount of CAP to our PEO, Mr. Finkelstein, and the average amount of CAP to the Non-PEO NEOs, with our Tangible Economic Return for 2020, 2021, 2022 and 2023. In 2020, we had two PEOs, Mr. Finkelstein and Mr. Votek, as shown in the table above, and the graph to the left shows the CAP to each PEO for 2020. As described in the Compensation Discussion and Analysis, we utilize Relative Tangible Economic Return for the respective performance period to determine 50% of annual incentive amounts for 2023 (and 37.5% for 2022, 2021 and 2020) and 50% of PSU award payouts. The Company uses multiple financial metrics for its annual incentive awards and PSU awards but has selected Tangible Economic Return as the financial performance measure that represents the most important performance measure (otherwise not required to be disclosed in the table above) used by the Company to link CAP to the NEOs for 2023 to Company performance. SAY-ON-PAY VOTE

  68. COMPENSATION ACTUALLY PAID AND TANGIBLE ECONOMIC RETURN

    | | ADVISORY APPROVAL OF EXECUTIVE COMPENSATION |

  69. COMPENSATION ACTUALLY PAID AND TANGIBLE ECONOMIC RETURN

    The Board is committed to corporate governance best practices and recognizes the significant interest of stockholders in executive compensation matters. The Company is providing this non-binding advisory vote pursuant to Section 14A of the Exchange Act. In considering this vote, the Company invites our stockholders to review the “Compensation Discussion and Analysis” and “Executive Compensation Tables” above. As described in the Compensation Discussion and Analysis, the MDC Committee is focused on continually enhancing the Company’s compensation framework to reflect strong compensation governance and reward sustained value creation.

  70. COMPENSATION ACTUALLY PAID AND TANGIBLE ECONOMIC RETURN

    | The MDC Committee is committed to institutionalizing an executive compensation program that attracts, retains and incentivizes top executive talent and generates long-term value for stockholders by directly linking compensation payout to Company performance without encouraging unnecessary risk-taking. |

  71. COMPENSATION ACTUALLY PAID AND TANGIBLE ECONOMIC RETURN

    | | The Board unanimously recommends that the stockholders vote FOR the following resolution: “RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and related narrative discussion, is hereby APPROVED. While this vote is advisory and non-binding, the Board and the MDC Committee value the views of the Company’s stockholders and will consider the voting results when making compensation decisions in the future. |

  72. COMPENSATION ACTUALLY PAID AND TANGIBLE ECONOMIC RETURN

    | | RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |

  73. COMPENSATION ACTUALLY PAID AND TANGIBLE ECONOMIC RETURN

    The Audit Committee is responsible for the appointment, compensation, retention and oversight of the Company’s independent registered public accounting firm. The Audit Committee has appointed Ernst & Young LLP (“EY”) to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2024, and stockholders are being asked to ratify this appointment at the Annual Meeting as a matter of good corporate governance. EY has served as Annaly’s independent registered public accounting firm since 2012. In appointing EY, the Audit Committee considered a number of factors, including EY’s: ▪ independence, ▪ objectivity, ▪ level of service, ▪ industry knowledge, ▪ technical expertise, and ▪ tenure as the independent auditor. The Company expects that representatives of EY will be present at the Annual Meeting, will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions. If the appointment of EY is not ratified, the Audit Committee will reconsider the appointment. Even if the appointment is ratified, the Audit Committee may, in its discretion, appoint a different independent auditor at any time during the year if the Audit Committee determines that such a change would be advisable and in the best interest of the Company.

  74. COMPENSATION ACTUALLY PAID AND TANGIBLE ECONOMIC RETURN

    | | The Board unanimously recommends a vote FOR the ratification of the appointment of Ernst & Young LLP as the Company’s Independent Registered Public Accounting Firm for the fiscal year ending December 31, 2024. |