DEF 14A of Annaly Capital Management Inc, Apr 3, 2025

DEF 14A of Annaly Capital Management Inc

Filed Apr 3, 2025 · FY20240001104659-25-031692

Open on EDGAR

  1. ROBUST STOCKHOLDER ENGAGEMENT DRIVES ENHANCEMENTS TO OUR EXECUTIVE COMPENSATION PROGRAM

    ROBUST STOCKHOLDER ENGAGEMENT DRIVES ENHANCEMENTS TO OUR EXECUTIVE COMPENSATION PROGRAM Since our management internalization transaction in 2020, the Management Development and Compensation (“MDC”) Committee of our Board has built a best-practice compensation program that incentivizes strong performance and aligns with stockholder interests. In 2024, we redoubled our always robust engagement efforts to fully understand your feedback, views and perspectives on our compensation practices and policies. During the course of this engagement, we spoke with stockholders representing approximately 60% of outstanding institutional shares, with the Chair of the MDC Committee participating in meetings with stockholders representing more than 40% of outstanding institutional shares. Through these meetings, we learned that while our stockholders are generally supportive of our compensation program, some investors asked us to take a closer look at the structure, complexity and application of our corporate scorecard, while others provided feedback on the scorecard metrics and overall pay mix and pay levels. In response to this feedback, the MDC Committee approved a number of changes designed to further enhance the rigor, and reduce the complexity, of our executive compensation program. We are grateful to the stockholders who shared their feedback, and we believe that the changes we have made address your views and concerns and serve to further enhance the pay-for-performance nature of our executive compensation program.

  2. BOARD COMPOSITION, LEADERSHIP AND SUCCESSION PLANNING CONTINUE TO BE GOVERNANCE PRIORITIES

    BOARD COMPOSITION, LEADERSHIP AND SUCCESSION PLANNING CONTINUE TO BE GOVERNANCE PRIORITIES As the Company has evolved, so has our Board. As we approach the 2025 Annual Meeting of Stockholders, I am grateful to the Directors who have guided us here. This year, three superb Directors — Michael Haylon, Francine J. Bovich and John H. Schaefer — are concluding their service on the Board following the Annual Meeting in accordance with our Board refreshment policy. Collectively, these three Directors have diligently represented Annaly stockholders for close to 40 years and have overseen the transformation of the Company from a monoline Agency mortgage REIT to the diversified capital manager we are today. I am particularly indebted to Mike Haylon, who has served as Independent Chair of the Board since 2020. Over the last five years — which span the COVID-19 pandemic, our management internalization, the sale of two businesses and the organic buildout of two more — Mike has always led with intelligence, integrity and humility. In preparation for this transition, the Board, led by Francine as Chair of the Nominating/Corporate Governance Committee, has overseen a multi-year Board and Committee refreshment and succession planning process. In 2023, we were excited to bring three new Directors onto our Board and this year, we are excited to see them take on roles of increasing visibility and responsibility on the Board. As part of the refreshment and succession planning process, the Board also reaffirmed its commitment to having an Independent Board Chair and selected our Risk Committee Chair Thomas Hamilton as Mike’s successor in the role of Independent Board Chair. On behalf of the entire Board, I want to thank you our stockholders for your essential role in the Company’s journey and to invite you to join us for this year’s Annual Meeting of Stockholders on May 14th. We look forward to speaking with you then. Sincerely, David L. Finkelstein Chief Executive Officer & Co-Chief Investment Officer April 3, 2025 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To the Stockholders of Annaly Capital Management, Inc.: Annaly Capital Management, Inc., a Maryland corporation (“Annaly” or the “Company”), will hold its annual meeting of stockholders (the “Annual Meeting”):

  3. BOARD COMPOSITION, LEADERSHIP AND SUCCESSION PLANNING CONTINUE TO BE GOVERNANCE PRIORITIES

    | MEETING INFORMATION | | | | Date and Time | | May 14, 2025 9:00 a.m. (Eastern Time) | | | | Virtual Meeting | | www.virtualshareholdermeeting.com/ NLY2025 | | | | Who May Vote | | Only common stockholders of record at the close of business on March 17, 2025, the record date for the Annual Meeting (the “Record Date”), may vote at the Annual Meeting and any postponements or adjournments thereof. | |

  4. BOARD COMPOSITION, LEADERSHIP AND SUCCESSION PLANNING CONTINUE TO BE GOVERNANCE PRIORITIES

    | ITEMS OF BUSINESS | | | | | | Proposal | | Board Vote Recommendation | | Page Reference | | 1 | Election of nine Directors for a term ending at the 2026 annual meeting of stockholders and when their respective successors are duly elected and qualify | | FOR each Director nominee | 11 | | 2 | Approval, on an advisory basis, of the Company’s executive compensation | | FOR | 69 | | 3 | Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2025 | | FOR | 70 | | 4 | Consideration of an advisory stockholder proposal to adopt the right to act by written consent | | AGAINST | 73 |

  5. BOARD COMPOSITION, LEADERSHIP AND SUCCESSION PLANNING CONTINUE TO BE GOVERNANCE PRIORITIES

    The Company’s Board of Directors (the “Board”) is soliciting proxies in connection with the Annual Meeting. The Company is sending the Notice of Internet Availability of Proxy Materials (the “Notice”), or a printed copy of the proxy materials, as applicable, commencing on or about April 3, 2025. To view the Proxy Statement and other materials about the Annual Meeting, go to www.proxyvote.com. All stockholders are cordially invited to attend the Annual Meeting, which will be conducted via a live webcast. The Company believes that the virtual meeting format allows enhanced participation of, and interaction with, our global stockholder base. During the upcoming virtual Annual Meeting, you may ask questions and will be able to vote your shares electronically from your home or any remote location with Internet connectivity. You may also submit questions in advance of the Annual Meeting by visiting www.proxyvote.com. The Company will respond to as many inquiries that are pertinent to the Company at the Annual Meeting as time allows. An audio broadcast of the Annual Meeting will also be available to stockholders by telephone toll-free at 1-888-880-1014 in the United States or 1-929-529-2982 if calling from outside the United States, and requesting the Annaly Capital Management Annual Meeting. If you plan to attend the Annual Meeting online or listen to the telephonic audio broadcast, you will need the 16-digit control number included in your Notice, on your proxy card or on the instructions that accompany your proxy materials. Please note that listening to the audio broadcast will not be deemed to be attending the Annual Meeting, and you cannot ask questions or vote from such audio broadcast. The Annual Meeting will begin promptly at 9:00 a.m. (Eastern Time). Online check-in will begin at 8:30 a.m. (Eastern Time), and you should allow ample time for the online check-in procedures.

  6. BOARD COMPOSITION, LEADERSHIP AND SUCCESSION PLANNING CONTINUE TO BE GOVERNANCE PRIORITIES

    | | By Order of the Board of Directors, Anthony C. Green Chief Corporate Officer, Chief Legal Officer & Secretary April 3, 2025 |

  7. BOARD COMPOSITION, LEADERSHIP AND SUCCESSION PLANNING CONTINUE TO BE GOVERNANCE PRIORITIES

    | IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON MAY 14, 2025 | The Company’s Proxy Statement and 2024 Annual Report to Stockholders are available at www.proxyvote.com. |

  8. BOARD COMPOSITION, LEADERSHIP AND SUCCESSION PLANNING CONTINUE TO BE GOVERNANCE PRIORITIES

    | PROXY SUMMARY | 1 | | CORPORATE GOVERNANCE AT ANNALY | 10 | | PROPOSAL 1 ELECTION OF DIRECTORS | 11 | | Director Nominees | 13 | | Governing Documents | 18 | | BOARD COMMITTEES | 19 | | Committee Membership Determinations | 19 | | Audit Committee | 20 | | Corporate Responsibility Committee | 20 | | Management Development and Compensation Committee | 21 | | Nominating/Corporate Governance Committee | 21 | | Risk Committee | 22 | | BOARD STRUCTURE AND PROCESSES | 23 | | Board Structure and Processes | 23 | | Board Leadership Structure | 23 | | Independence of Continuing Directors | 24 | | Executive Sessions of Independent Directors | 24 | | Board Oversight of Risk | 24 | | CEO Performance Reviews and Management Succession Planning | 25 | | Board Effectiveness, Self-Evaluations and Refreshment | 25 | | Director Criteria and Qualifications | 26 | | Director Nomination Process | 27 | | Stockholder Recommendation of Director Candidates | 27 | | Communications with the Board | 27 | | Director Attendance | 27 | | Board Commitment and Service on Other Public Company Boards | 28 | | Director Orientation and Continuing Education | 28 | | Certain Relationships and Related Party Transactions | 28 | | Compensation of Directors | 29 | | EXECUTIVE OFFICERS | 31 | | COMPENSATION DISCUSSION AND ANALYSIS | 32 | | Executive Summary | 33 | | How Executive Compensation Decisions Are Made | 39 | | Executive Compensation Design and Award Decisions for 2024 | 41 | | Executive Compensation Policies | 55 | | Report of the Compensation Committee | 56 | | EXECUTIVE COMPENSATION TABLES | 57 | | Summary Compensation Table | 57 |

  9. BOARD COMPOSITION, LEADERSHIP AND SUCCESSION PLANNING CONTINUE TO BE GOVERNANCE PRIORITIES

    | Grants of Plan-Based Awards | 58 | | Outstanding Equity Awards at Fiscal Year-End | 59 | | Stock Vested in 2024 | 60 | | Pension Benefits and Nonqualified Deferred Compensation | 60 | | Potential Payments Upon Termination or Change in Control | 60 | | Compensation Committee Interlocks and Insider Participation | 63 | | CEO Pay Ratio | 63 | | PAY FOR PERFORMANCE DISCLOSURE | 64 | | Pay Versus Performance | 64 | | Financial Performance Measures | 66 | | Relationship Between Financial Performance Measures and Compensation Actually Paid | 66 | | SAY-ON-PAY VOTE | 69 | | PROPOSAL 2 ADVISORY APPROVAL OF EXECUTIVE COMPENSATION | 69 | | AUDIT COMMITTEE MATTERS | 70 | | PROPOSAL 3 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 70 | | Report of the Audit Committee | 71 | | Relationship with Independent Registered Public Accounting Firm | 72 | | STOCKHOLDER PROPOSAL | 73 | | PROPOSAL 4 CONSIDERATION OF AN ADVISORY STOCKHOLDER PROPOSAL TO ADOPT THE RIGHT TO ACT BY WRITTEN CONSENT | 73 | | Board of Directors’ Statement | 74 | | STOCK OWNERSHIP INFORMATION | 76 | | Security Ownership of Certain Beneficial Owners and Management | 76 | | OTHER INFORMATION | 78 | | Where You Can Find More Information | 78 | | Stockholder Proposals and Nominations | 78 | | Other Matters | 79 | | Questions and Answers about the Annual Meeting | 79 | | Cautionary Note Regarding Forward-Looking Statements | 85 | | APPENDIX A | A-1 | | Non-GAAP Reconciliations | A-1 |

  10. Stockholder Engagement and Responding to the 2024 Say-on-Pay Vote

    | | What We Discussed | Following the results of our 2024 advisory resolution on executive compensation (commonly known as a “Say-on-Pay” vote), which received support of approximately 63% of votes cast, versus our prior five-year average of approximately 88%, we expanded and deepened our already robust engagement efforts to gather our stockholders’ feedback and understand their concerns. We solicited feedback on our executive compensation program and practices, including: ▪ our annual incentive framework, ▪ the structure and scoring methodology of our corporate scorecard, ▪ the selection of performance metrics and the goal-setting process, and ▪ overall pay mix and pay levels. |

  11. STOCKHOLDER FEEDBACK AND CHANGES TO OUR EXECUTIVE COMPENSATION PROGRAM

    STOCKHOLDER FEEDBACK AND CHANGES TO OUR EXECUTIVE COMPENSATION PROGRAM Through our engagement efforts, we learned that our stockholders are generally supportive of the basic tenets and core framework of our compensation program. However, some stockholders expressed concern about the structure, complexity and application of our corporate scorecard, which was the primary determinant of our named executive officers’ (“NEOs”) overall incentive awards (cash and equity). As outlined below, we also received feedback on the scorecard metrics and overall pay mix and pay levels. While the MDC Committee determined it would be possible to implement certain responsive changes on an immediate basis for 2024, in light of the timing and breadth of the feedback we received from our stockholders, the MDC Committee simultaneously committed to a broader redesign of our executive compensation program for 2025. Changes for both 2024 and 2025 are described below and in further detail in the “Compensation Discussion and Analysis” section of this Proxy Statement.

  12. STOCKHOLDER FEEDBACK AND CHANGES TO OUR EXECUTIVE COMPENSATION PROGRAM

    | What We Heard | What We Did for 2024 | What We Are Doing for 2025 | | Simplify corporate scorecard | ▪ Streamlined the scoring methodology and removed the scaling feature used to calculate overall scores | ▪ Removing the Absolute Tangible Economic Return modifier and instead incorporating this metric directly into the scorecard | | Use objective, publicly disclosed and/or quantifiable scorecard metrics | ▪ For Market Risk metric, replaced competitively sensitive metric with fully disclosed metric; for Operational Risk metric, quantified achievement of specific key risk indicators | ▪ Removing the Operational Risk metric from the scorecard and instead considering similar achievements as part of an NEO’s individual assessment | | Increase weighting of absolute vs. relative scorecard metrics | | ▪ Rebalancing scorecard metrics such that they are comprised of 60% absolute performance metrics (vs. 50%) and 40% relative performance metrics (vs. 50%) | | Apply scorecard only to annual cash incentives | | ▪ Scorecard will apply only to annual cash incentive opportunities; long-term equity will generally be awarded at pre-determined target levels | | Increase difficulty required to receive incentive payout | ▪ Increased the difficulty for receiving a payout, reduced the payout percentage for achieving the minimum performance threshold and increased the likelihood of receiving 0% | ▪ Removing Operational Risk metric will produce a fully quantitative and objective scorecard; separating cash and equity determinations will reduce maximum payout opportunity | | Increase equity as a percentage of total compensation | | ▪ CEO will receive 55% (vs. 50%) and other NEOs will receive 50% (vs. 44%) of total compensation in the form of equity | | Increase performance stock units (“PSUs”) as a percentage of total equity | | ▪ All NEOs will receive 60% (vs. 50%) of total equity in the form of PSUs | | No material year-over-year increase in NEO pay targets | ▪ No increase to the NEOs’ pay targets from their 2023 levels | ▪ No increase to the NEOs’ pay targets for a second consecutive year |

  13. SKILL/EXPERIENCE SUMMARY OF CONTINUING DIRECTORS(1)

    SKILL/EXPERIENCE SUMMARY OF CONTINUING DIRECTORS(1)

  14. SKILL/EXPERIENCE SUMMARY OF CONTINUING DIRECTORS(1)

    | Skill/Experience | | FINKELSTEIN | HAMILTON | HANNAN | LAGUERRE | LAROCHE | REEVES | VOTEK | WEDE | WILLIAMS | TOTAL | | | Legal and Regulatory Understanding or experience with legal, regulatory, government or public policy matters. | | | | | | | | | | 4/9 | | | Risk Management Understanding or experience with managing and overseeing risk in public or private companies. | | | | | | | | | | 9/9 | | | Corporate Governance Experience on public company boards and understanding of corporate governance practices and policies. | | | | | | | | | | 9/9 | | | Leadership and Strategy Executive management experience and understanding or experience with managing growth and developing and implementing strategic plans at public or private companies. | | | | | | | | | | 9/9 | | | Human Capital Management Understanding or experience with human capital management in public or private companies. | | | | | | | | | | 7/9 | | | Corporate Responsibility Understanding or experience with corporate responsibility matters in public or private companies. | | | | | | | | | | 6/9 | | | Finance and Accounting Understanding or experience with financial reporting, accounting and auditing. | | | | | | | | | | 6/9 | | | Financial Services Understanding or experience with financial services. | | | | | | | | | | 8/9 | | | Investment Management Understanding or experience with investment management, investment banking and asset management. | | | | | | | | | | 7/9 | | | Industry Knowledge Understanding or experience in the mortgage finance, real estate and housing industry. | | | | | | | | | | 7/9 | | | Capital Markets and M&A Understanding or experience with capital markets matters, capital allocation, investment banking and mergers and acquisitions of public or private companies. | | | | | | | | | | 9/9 | | | Information Technology and Cybersecurity Understanding or experience in matters related to technology advancement, information systems, data management and cybersecurity at public or private companies. | | | | | | | | | | 3/9 | | | TOTAL | 10 | 9 | 10 | 10 | 9 | 9 | 10 | 9 | 8 | |

  15. SKILL/EXPERIENCE SUMMARY OF CONTINUING DIRECTORS(1)

    “Continuing Directors” represent the nine members of the Board following the Annual Meeting (assuming all nominees are elected).

  16. ATTRIBUTES OF CONTINUING DIRECTORS(1)

    ATTRIBUTES OF CONTINUING DIRECTORS(1) Our Corporate Governance Guidelines formalize the Board’s commitment to seeking out highly qualified candidates of diverse backgrounds and experiences and include a Director refreshment policy requiring that Independent Directors may not stand for re-election following the earlier of their 15th anniversary of service on the Board or their 73rd birthday. In extraordinary circumstances, the Board may determine that an Independent Director may stand for re-election after having reached such age or term limit for up to three additional one-year terms.

  17. Corporate Responsibility

    Corporate Responsibility In June 2024, we published our fifth annual Corporate Responsibility Report, titled Powering American Homeownership. The report details our corporate responsibility initiatives, which span four key areas: Our Corporate Governance Guidelines and Board Committee charters reflect integrated oversight of environmental, social and governance practices, initiatives and related risks across the Board and its Committees. The full Board has overall responsibility for this oversight, and each of the Committees has oversight responsibility of specific matters relating to its purpose, duties and responsibilities. “Continuing Directors” represent the nine members of the Board following the Annual Meeting (assuming all nominees are elected).

  18. Corporate Responsibility

    | Best Practices | | | Director Independence and Oversight(1) | ▪ Separate CEO and Independent Chair of the Board ▪ 89% of Continuing Directors are Independent ▪ Regular executive sessions of Independent Directors ▪ Key Board Committees (Audit, Management Development and Compensation and Nominating/Corporate Governance) are comprised entirely of Independent Directors ▪ Board oversees a succession plan for the CEO and other senior executives | | Board Refreshment and Composition(1) | ▪ Board refreshment policy triggered upon earlier of 15 years of service or 73rd birthday – 44% of Continuing Directors have tenure of less than 5 years ▪ Board represents diverse backgrounds and a wide range of professional experience – 33% of Continuing Directors are women – 56% of Continuing Directors are racially/ethnically diverse | | Director Qualifications and Evaluation | ▪ Annual Board, Committee and individual Director self-evaluations conducted by an external facilitator, with periodic use of individual interview format ▪ Comprehensive Board succession planning process ▪ Corporate Governance Guidelines limit the number of outside public company boards, other than Annaly, on which Directors can serve to three other boards for non-CEOs and one other board for sitting CEOs ▪ Nominating/Corporate Governance Committee evaluates and considers time commitments of Directors as part of its annual Board self-evaluation process ▪ Multiple Audit Committee financial experts | | Stockholder Rights and Engagement | ▪ All Directors are elected annually ▪ Majority vote standard for uncontested elections ▪ Annual stockholder advisory vote on executive compensation ▪ No supermajority common stockholder vote requirements to approve amendments to the Company’s charter and bylaws ▪ Stockholders representing at least 25% of votes entitled to be cast on a matter may request a special meeting of the Company ▪ Virtual meeting format enables participation from global stockholder base ▪ Robust stockholder engagement, including over 210 investor meetings in 2024 and outreach to 100% of top 100 stockholders | | Corporate Responsibility | ▪ Board created Corporate Responsibility Committee in 2017 ▪ Publish annual Corporate Responsibility Reports, including climate-related disclosures following TCFD guidance and supplemental disclosures under the Sustainability Accounting Standards Board (SASB) framework ▪ Sponsor seven employee-led networks ▪ Published Political Engagement and Contributions Policy that codifies our longstanding practice prohibiting the use of corporate funds for any political contributions or expenditures ▪ Included in the FTSE4Good Index for the sixth consecutive year |

  19. Corporate Responsibility

    “Continuing Directors” represent the nine members of the Board following the Annual Meeting (assuming all nominees are elected).

  20. Corporate Responsibility

    | | ELECTION OF DIRECTORS |

  21. Corporate Responsibility

    At the Annual Meeting, stockholders will vote to elect nine nominees to serve as Directors, whose terms will expire at the annual meeting of stockholders in 2026 (the “2026 Annual Meeting”) and when their respective successors are duly elected and qualify. The table below provides summary information about each of the Directors other than Francine J. Bovich, Michael Haylon and John H. Schaefer, who have not been nominated for election as Directors in accordance with the Board’s refreshment policy. The Company and the Board wish to express their gratitude to Ms. Bovich and Messrs. Haylon and Schaefer for their many years of dedicated service on the Board.

  22. Corporate Responsibility

    | | The Board has nominated and unanimously recommends a vote FOR each of: | | | | | ▪ David L. Finkelstein ▪ Thomas Hamilton ▪ Kathy Hopinkah Hannan | ▪ Martin Laguerre ▪ Manon Laroche ▪ Eric A. Reeves | ▪ Glenn A. Votek ▪ Scott Wede ▪ Vicki Williams | | | as Directors, with each to hold office until the 2026 Annual Meeting, and until their respective successors are duly elected and qualify. Unless you specify a contrary choice, the persons named in the enclosed proxy will vote FOR each of these nominees. In the event that these nominees should become unavailable for election due to any presently unforeseen reason, the persons named in the proxy will have the right to use their discretion to vote for a substitute or the Board may reduce the number of Directors elected at the Annual Meeting. | | |

  23. Corporate Responsibility

    | Name | | Age | Principal Occupation | Director since | Independent | Committees | Other Current Public Company Boards | | | David L. Finkelstein | 52 | Chief Executive Officer and Co-Chief Investment Officer Annaly Capital Management, Inc. | 2020 | | | 0 | | | Thomas Hamilton | 57 | Former Strategic Advisor to the Global Head of Fixed Income, Currencies and Commodities Barclays Capital | 2019 | | Risk (Chair) Audit MDC | 1 | | | Kathy Hopinkah Hannan | 63 | Former National Managing Partner, Global Lead Partner KPMG LLP | 2019 | | Audit (Chair) MDC NCG | 2 | | | Martin Laguerre | 51 | Co-Head of Global Diversified Private Equity GCM Grosvenor | 2023 | | Audit CR | 0 | | | Manon Laroche | 55 | Former Managing Director, Head of Global Spread Products Securitized Sales, North America Citigroup | 2023 | | CR Risk | 0 | | | Eric A. Reeves | 52 | Founder and Chief Executive Officer Prospect Park LLC | 2021 | | CR (Chair) NCG Risk | 0 | | | Glenn A. Votek | 66 | Former Chief Financial Officer Annaly Capital Management, Inc. | 2019 | | CR Risk | 0 | | | Scott Wede | 52 | Former Global Head of Securitized Products and Municipal Finance Barclays Capital | 2023 | | Audit Risk | 0 | | | Vicki Williams | 52 | Chief Human Resources Officer NBCUniversal | 2018 | | MDC (Chair) NCG | 0 |

  24. Director Nominees

    Director Nominees

  25. Director Nominees

    | DAVID L. FINKELSTEIN | | Director since 2020 | | Chief Executive Officer & Co-Chief Investment Officer COMMITTEES ▪ None | CAREER HIGHLIGHTS Annaly Capital Management, Inc. ▪ Chief Executive Officer (March 2020 to present) ▪ Co-Chief Investment Officer (January 2025 to present) ▪ Chief Investment Officer (November 2016 to December 2021, November 2022 to January 2025) ▪ President (March 2020 to December 2022) ▪ Chief Investment Officer, Agency and RMBS (February 2015 to March 2020) ▪ Head of Agency Trading (August 2013 to February 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 Co-Chief Investment Officer and his extensive markets and policy experience. |

  26. Director Nominees

    | THOMAS HAMILTON | | Independent Director since 2019 | | COMMITTEES ▪ Risk (Chair) ▪ Audit ▪ Management Development and Compensation | 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 his own charitable scientific effort, the CureFA Foundation ▪ Director of the Friedreich’s Ataxia Research Alliance 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. |

  27. 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 (“KPMG”) ▪ 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) ▪ Former Vice Chairman of Human Resources OTHER AFFILIATIONS ▪ Former Chairman of the Board of Trustees and member of the Executive Committee of the Smithsonian National Museum of the American Indian ▪ Trustee of the Committee for Economic Development in Washington D.C. ▪ Active member of Women Corporate Directors and National Association of Corporate Directors ▪ Chairman of the Board and 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 Worldwide 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. |

  28. Director Nominees

    | MARTIN LAGUERRE | | Independent Director since 2023 | | COMMITTEES ▪ Audit ▪ Corporate Responsibility | CAREER HIGHLIGHTS GCM Grosvenor (NASDAQ: GCMG), a global alternative asset management solutions provider ▪ Co-Head of Global Diversified Private Equity (March 2025 to present) Warburg Pincus, a global private equity firm ▪ Senior Advisor to capital solutions, financial services and business services (2023 to March 2025) 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 Competitive Power Ventures ▪ Member of McGill University Board of Governors Investment Committee ▪ Representing Warburg Pincus, previously served as a board member of Kestra Holdings ▪ 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. |

  29. 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. |

  30. 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 merchant 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. |

  31. 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. |

  32. 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 Financial 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) 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 real estate investment trust (“REIT”) sector. |

  33. 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. |

  34. Independence of Continuing Directors(1)

    Independence of Continuing Directors(1)

  35. Independence of Continuing Directors(1)

    | NYSE rules and our Corporate Governance Guidelines require that at least a majority of Board members are Independent Directors. The Board has adopted the definition of “independent director” set forth in Section 303A of the NYSE rules and has affirmatively determined that each Continuing Director (other than Mr. Finkelstein) has no material relationships with the Company other than as a Director (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company) and is therefore independent under all applicable criteria for independence in accordance with the standards set forth in the NYSE rules and our Corporate Governance Guidelines. | |

  36. 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 2025 are set forth below:

  37. Compensation of Directors

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

  38. Compensation of Directors

    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. Committee Chairs receive Committee Chair Retainers in addition to, and not in lieu of, Committee Member Retainers.

  39. ROLE OF THE INDEPENDENT COMPENSATION CONSULTANT

    ROLE OF THE INDEPENDENT COMPENSATION CONSULTANT During 2024, the MDC Committee retained an independent compensation consultant, Frederic W. Cook & Co. (“F. W. Cook”), to assist 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.

  40. 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, 2024.

  41. DIRECTOR COMPENSATION

    | Name | Fees Earned or Paid in Cash(1) ($) | Stock Awards(2) ($) | All Other Compensation ($) | Total ($) | | Francine J. Bovich | 135,000 | 175,000 | 0 | 310,000 | | Thomas Hamilton | 145,000 | 175,000 | 0 | 320,000 | | Kathy Hopinkah Hannan | 155,000 | 175,000 | 0 | 330,000 | | Michael Haylon | 235,000 | 175,000 | 0 | 410,000 | | Martin Laguerre | 120,000 | 175,000 | 0 | 295,000 | | Manon Laroche | 120,000 | 175,000 | 0 | 295,000 | | Eric A. Reeves | 145,000 | 175,000 | 0 | 320,000 | | John H. Schaefer | 120,000 | 175,000 | 0 | 295,000 | | Glenn A. Votek | 120,000 | 175,000 | 0 | 295,000 | | Scott Wede | 120,000 | 175,000 | 0 | 295,000 | | Vicki Williams | 140,000 | 175,000 | 0 | 315,000 |

  42. DIRECTOR COMPENSATION

    (1) Fees earned or paid in cash may be prorated for partial year Board and/or Committee service. 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 15, 2024 and 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. EXECUTIVE OFFICERS The following table sets forth certain information with respect to the Company’s executive officers:

  43. DIRECTOR COMPENSATION

    | Name | Age | Title | | David L. Finkelstein | 52 | Chief Executive Officer and Co-Chief Investment Officer | | Serena Wolfe | 45 | Chief Financial Officer | | Steven F. Campbell | 53 | President and Chief Operating Officer | | Anthony C. Green | 50 | Chief Corporate Officer, Chief Legal Officer and Secretary |

  44. DIRECTOR COMPENSATION

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

  45. 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 November 2019) ▪ Partner (2011 to 2017) ▪ Global RHC Assurance Leader ▪ 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) EDUCATION ▪ Bachelor of Commerce in Accounting, the University of Queensland ▪ Certified Public Accountant in the states of New York and California |

  46. DIRECTOR COMPENSATION

    | STEVEN F. CAMPBELL | | | | | CAREER HIGHLIGHTS Annaly Capital Management, Inc. ▪ President (December 2022 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 |

  47. 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 |

  48. DIRECTOR COMPENSATION

    This Compensation Discussion and Analysis (“CD&A”) 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 2024 and is divided into four topics: (1) Executive Summary, (2) How Executive Compensation Decisions are Made, (3) Executive Compensation Design and Award Decisions for 2024 and (4) Executive Compensation Policies.

  49. DIRECTOR COMPENSATION

    | 1. EXECUTIVE SUMMARY | 33 | | Who We Paid | 33 | | Factors Shaping Our Pay Design and Decisions | 33 | | Stockholder Engagement and Responding to the 2024 Say-on-Pay Vote | 33 | | Philosophy and Program Objectives | 35 | | Components of Executive Compensation | 36 | | Executive Compensation Policies and Practices | 37 | | Total Direct Compensation Table | 38 | | 2. HOW EXECUTIVE COMPENSATION DECISIONS ARE MADE | 39 | | Overview | 39 | | Role of the MDC Committee’s Independent Compensation Consultant | 39 | | Company Market Data | 39 | | 3. EXECUTIVE COMPENSATION DESIGN AND AWARD DECISIONS FOR 2024 | 41 | | Overview | 41 | | Base Salary | 42 |

  50. DIRECTOR COMPENSATION

    | Annual Incentive Framework | 42 | | 2024 Annual Incentives — Cash and Equity Awards | 44 | | 2024 Annual Incentives — Corporate Performance | 45 | | 2024 Annual Incentives — Individual Performance | 47 | | 2024 Annual Incentives — Absolute Tangible Economic Return Modifier | 50 | | Payout of PSU Awards Granted in 2022 | 53 | | Changes for 2025 Cash Incentive — Corporate Performance Scorecard | 54 | | Dividend Equivalents on RSUs and PSU Awards | 54 | | Other Compensation | 54 | | Severance Arrangements | 55 | | 4. EXECUTIVE COMPENSATION POLICIES | 55 | | Stock Ownership Guidelines | 55 | | Clawback Policies | 55 | | Prohibition on Hedging Company Securities | 55 | | Prohibition on Pledging Company Securities | 56 | | Risks Related to Compensation Policies and Practices | 56 | | REPORT OF THE COMPENSATION COMMITTEE | 56 |

  51. STOCKHOLDER ENGAGEMENT AND RESPONDING TO THE 2024 SAY-ON-PAY VOTE

    STOCKHOLDER ENGAGEMENT AND RESPONDING TO THE 2024 SAY-ON-PAY VOTE Stockholder Engagement Last year, in response to conversations with stockholders ahead of our 2024 Annual Meeting, we filed supplemental proxy materials that provided additional context on the MDC Committee’s executive compensation decisions for 2023, along with their commitment to adopt several changes. These changes were primarily designed to enhance the rigor, and reduce the complexity, of the corporate scorecard, which is used to determine 75% of our NEOs’ overall incentive awards, and included increasing the difficulty required to receive a payout under the corporate scorecard, reducing the percentage of target incentive an NEO can earn for achieving minimum threshold performance and eliminating the scaling factor used to calculate overall scores. At our 2024 Annual Meeting, our executive compensation program received the support of approximately 63% of votes cast, versus our prior five-year average of approximately 88%. Our MDC Committee was disappointed with this result and, while we have regular outreach and ongoing discussions with stockholders to learn more about their perspectives, we expanded and deepened our engagement efforts to gather our stockholders’ feedback and understand their concerns. We contacted 100 stockholders representing over 90% of institutional shares and nearly 60% of outstanding shares and invited them to meet with members of our Board and management team to discuss their views on our executive compensation program and related policies and practices. In response to our invitation, we held 22 meetings with 18 stockholders, who collectively represent approximately 60% of outstanding institutional shares (and 38% of total shares outstanding). MDC Committee Chair Vicki Williams participated in meetings with stockholders representing over 40% of institutional shares (and 26% of our total outstanding shares). Leaders from the Company’s Legal, Corporate Responsibility and Investor Relations teams participated in all stockholder meetings. Our NEOs did not participate in meetings unless a stockholder requested them. In the first quarter of 2025, we engaged again with a number of our largest stockholders to review proposed enhancements reflective of stockholder feedback and confirmed that the changes address their concerns. We also conducted briefing calls with leading proxy advisory firms. In addition to our compensation-focused engagement meetings, the Company held an Investor Day in November 2024 to discuss firm strategy and performance, both of which directly inform the MDC Committee’s executive compensation design and award decisions. Key Stockholder Feedback We learned that our stockholders are generally supportive of the basic tenets and core framework of our compensation program, as most compensation is “at risk” and the program utilizes a diversified mix of rigorous performance metrics tied to stockholder value. However, some stockholders expressed concern about the structure and complexity of our corporate scorecard. While they appreciated that the scorecard is intended to closely align compensation with the Company’s performance across its key financial and risk metrics, a number of stockholders expressed a preference for a more straightforward design with a streamlined scoring methodology and enhanced rigor, transparency and objectivity of metrics. Certain stockholders also expressed a preference for the MDC Committee to apply the corporate scorecard solely to its determination of annual cash incentives (versus both cash and stock) and to increase equity as a percentage of target total direct compensation and/or increase performance-based equity as a percentage of total target equity. Recent Changes and Responsive Actions While the MDC Committee determined it would be possible to implement certain responsive changes on an immediate basis for 2024, in light of the timing and breadth of our stockholders’ feedback, the Committee simultaneously committed to a broader redesign of our executive compensation program for 2025. Changes for both 2024 and 2025 are described below and in further detail in the “Executive Compensation Design and Award Decisions” section of this CD&A.

  52. STOCKHOLDER ENGAGEMENT AND RESPONDING TO THE 2024 SAY-ON-PAY VOTE

    | Stockholder Feedback | Prevalence of Feedback | Responsive Action | | Simplify corporate scorecard | High | ▪ For 2024, we streamlined the scoring methodology and removed the scaling feature used to calculate the overall score for the scorecard ▪ For 2025, we are removing the Absolute Tangible Economic Return modifier and are instead incorporating Absolute Tangible Economic Return directly into the scorecard as a new metric | | Use objective, publicly disclosed and/or quantifiable scorecard metrics | High | ▪ For 2024, we replaced an important, but competitively sensitive, Market Risk metric (Daily Liquid Box) with a new Market Risk metric (Total Assets Available for Financing as a Percentage of Equity) based on financial information we disclose on a quarterly basis. We also bolstered the transparency of the Operational Risk metric by tying its achievement to specific key risk indicators (“KRIs”) ▪ For 2025, we are removing the Operational Risk metric from the scorecard and will instead consider Operational Risk achievements as part of an NEO’s individual assessment | | Apply scorecard only to annual cash incentives | Moderate | ▪ For 2025, the scorecard will apply only to annual cash incentive opportunities; long-term equity granted in early 2026 for performance in 2025 will generally be awarded at pre-determined target levels | | Increase difficulty required for incentive payout | Moderate | ▪ For 2024, we increased the difficulty required to receive a payout under the corporate scorecard and reduced the payout percentage for achieving the minimum performance threshold from 80% to 50% of target – We also increased the likelihood of receiving a 0% payout by removing the scorecard’s scaling feature ▪ For 2025, we are removing Operational Risk from the scorecard, resulting in a fully quantitative and objective scorecard. In addition, bifurcating the annual cash incentive and equity incentive determinations will reduce both an NEO’s maximum incentive opportunity and their actual payout in strong performance years as equity incentives will be capped at target | | Increase equity as a percentage of total compensation | Moderate | ▪ For 2025, the CEO will receive 55% of his total compensation (including base salary and cash and equity incentives) in the form of equity (up from 50%) and the other NEOs will receive 50% of their total compensation in the form of equity (up from an average of 44%) |

  53. STOCKHOLDER ENGAGEMENT AND RESPONDING TO THE 2024 SAY-ON-PAY VOTE

    | Stockholder Feedback | Prevalence of Feedback | Responsive Action | | Increase performance-based equity as a percentage of total compensation | Moderate | ▪ For 2025, all NEOs will receive 60% of their target equity in the form of PSUs (up from 50%) | | No material year-over-year increase in executive pay targets | Low | ▪ For 2024, the MDC Committee declined to raise NEO pay targets from their 2023 levels ▪ For 2025, the MDC Committee is declining to raise NEO pay targets for a second consecutive year | | Increase scorecard’s weighting of absolute vs. relative performance metrics | Low | ▪ For 2025, the scorecard metrics will be rebalanced such that they are comprised of 60% absolute performance metrics (up from 50%) and 40% relative performance metrics (down from 50%) |

  54. COMPONENTS OF EXECUTIVE COMPENSATION

    | 2024 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 | ▪ Achievement of corporate scorecard and individual objectives | ▪ No guaranteed minimum award amounts ▪ Maximum award value of 150% of target | | | Long- Term | EQUITY INCENTIVES | ▪ Align NEO’s interests with long-term stockholder interests ▪ Encourage long-term, sustainable performance results ▪ Support retention of key talent | ▪ For 2024, determined together with annual cash incentives based on achievement of corporate scorecard and individual objectives (with equity incentives to generally be awarded at pre-determined target levels for 2025) ▪ Restricted stock units (“RSUs”) vest based on continued service and provide both retention and stock value accumulation incentives ▪ PSUs eligible to vest based on achievement of multiple rigorous Company performance metrics over a three-year performance period | ▪ No guaranteed minimum award amounts ▪ Maximum award value at grant of 150% of target (with equity incentives capped at target starting with 2025) ▪ PSUs have a maximum award payout of 150% of grant ▪ Equally-weighted mix of PSUs and RSUs for 2024 (with PSUs increasing to 60% of target equity for 2025) |

  55. EXECUTIVE COMPENSATION POLICIES AND PRACTICES

    | | What the Company Does | | What the Company Does Not Do | | ▪ Majority of compensation is “at risk” — for 2024, variable compensation comprised 95% of the CEO’s total direct compensation and 88% of the other NEOs’ total direct compensation(1) ▪ MDC Committee applied a corporate scorecard with financial and non-financial goals (75% weighting) and individual achievements (25% weighting) in determining total incentive awards for 2024 ▪ Diversified mix of rigorous performance metrics, including Tangible Economic Return and Earnings Available for Distribution (“EAD”) Return on Equity ▪ Relative performance metrics for the corporate scorecard and PSU program require above-median (i.e., above the 55th percentile) performance to achieve target payouts ▪ Robust clawback policies cover cash and all equity compensation (time- and performance-based awards) and are triggered by a financial restatement or misconduct ▪ All NEOs are subject to robust stock ownership requirements and holding restrictions ▪ MDC Committee annual assessment of NEO compensation practices against peer companies and best practices ▪ MDC Committee annual compensation risk assessment ▪ Regular stockholder feedback through robust outreach, including meetings with MDC Committee Chair | | ▪ 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 | |

  56. TOTAL DIRECT COMPENSATION TABLE

    TOTAL DIRECT COMPENSATION TABLE The following table supplements the Summary Compensation Table on page 57 and shows the total direct compensation paid or awarded to each NEO for the last three fiscal years. The table below is not a substitute for the required information included in the Summary Compensation Table; however, the MDC Committee believes that 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 2024 for performance in 2023 are included in the Summary Compensation Table but not in the Total Direct Compensation Table; conversely, the RSU and PSU awards granted in early 2025 for performance in 2024 are included in the Total Direct Compensation Table but not in the Summary Compensation Table.

  57. 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, 2024 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 2024 performance, but because those equity awards were granted in early 2025, 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 2024, these awards are included in the Total Direct Compensation Table on page 38 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 2024.

  58. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Award(1) ($) | All Other Compensation(2) ($) | Total ($) | | David L. Finkelstein Chief Executive Officer, Co-Chief Investment Officer and Director | 2024 | 1,000,000 | 8,483,650 | 8,328,092 | 13,800 | 17,825,542 | | | 2023 | 1,000,000 | 7,328,100 | 6,984,000 | 15,200 | 15,327,300 | | | 2022 | 1,000,000 | 5,984,000 | 7,324,950 | 14,732 | 14,323,682 | | Serena Wolfe Chief Financial Officer | 2024 | 750,000 | 2,723,200 | 2,348,400 | 11,750 | 5,833,350 | | | 2023 | 750,000 | 2,348,400 | 1,781,232 | 14,250 | 4,893,882 | | | 2022 | 750,000 | 1,781,250 | 749,992 | 13,032 | 3,294,274 | | Steven F. Campbell President and Chief Operating Officer | 2024 | 750,000 | 3,078,650 | 2,739,800 | 13,800 | 6,582,250 | | | 2023 | 750,000 | 2,739,800 | 1,828,704 | 15,200 | 5,333,704 | | | 2022 | 750,000 | 1,828,750 | 1,799,961 | 14,732 | 4,393,443 | | Anthony C. Green Chief Corporate Officer, Chief Legal Officer and Secretary | 2024 | 750,000 | 2,287,000 | 2,035,280 | 13,800 | 5,086,080 | | | 2023 | 750,000 | 2,035,300 | 1,781,232 | 15,200 | 4,581,732 | | | 2022 | 750,000 | 1,781,250 | 1,874,948 | 14,732 | 4,420,930 |

  59. 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 prior to 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 prior to the grant date assuming that the PSUs would become earned at target, which was determined to be the probable outcome as of the grant date, excluding the effect of estimated forfeitures. Assuming the maximum level of performance, the grant date fair value of the stock awards granted during 2024 would be:

  60. Summary Compensation Table

    | Name | Grant Date Fair Value | | David L. Finkelstein | $10,095,733 | | Serena Wolfe | $2,846,850 | | Steven F. Campbell | $3,321,325 | | Anthony C. Green | $2,467,270 |

  61. Summary Compensation Table

    For more information about the assumptions used for determining the grant date fair value of the NEOs’ equity awards, see Note 15, “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, 2024. Represents Company matching contributions to the Company’s 401(k) plan.

  62. 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, 2024. See “2024 Annual Incentives — Cash and Equity Awards” in the Compensation Discussion and Analysis above for a description of the plan-based awards.

  63. 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 | 2/01/2024 | RSU | — | — | — | 212,777 | 4,164,046 | | | 2/01/2024 | PSU | 106,389 | 212,777 | 319,166 | — | 4,164,046 | | Serena Wolfe | 2/01/2024 | RSU | — | — | — | 60,000 | 1,174,200 | | | 2/01/2024 | PSU | 30,000 | 60,000 | 90,000 | — | 1,174,200 | | Steven F. Campbell | 2/01/2024 | RSU | — | — | — | 70,000 | 1,369,900 | | | 2/01/2024 | PSU | 35,000 | 70,000 | 105,000 | — | 1,369,900 | | Anthony C. Green | 2/01/2024 | RSU | — | — | — | 52,000 | 1,017,640 | | | 2/01/2024 | PSU | 26,000 | 52,000 | 78,000 | — | 1,017,640 |

  64. 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 2024 based on 2023 performance. For additional details about these PSUs, see “2023 Annual Incentives — Grant of PSUs” in the Compensation Discussion and Analysis included in the Company’s proxy statement filed in April 2024. (2) Amounts represent the number of RSUs granted in early 2024 based on 2023 performance. For additional details about these RSUs, see “2023 Annual Incentives — Grant of RSUs” in the Compensation Discussion and Analysis included in the Company’s proxy statement filed in April 2024. See Footnote 1 to the Summary Compensation Table for additional information on how the grant date fair value for these awards was determined.

  65. 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, 2024. 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 31, 2024 of $18.30 per share.

  66. 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 | 2/1/2022 | 56,914 | 1,041,526 | 0 | 0 | | | 2/1/2023 | 123,045 | 2,251,724 | 0 | 0 | | | 2/1/2023 | 0 | 0 | 276,843 | 5,066,227 | | | 2/1/2024 | 235,120 | 4,302,696 | 0 | 0 | | | 2/1/2024 | 0 | 0 | 352,682 | 6,454,071 | | Serena Wolfe | 2/1/2022 | 5,829 | 106,671 | 0 | 0 | | | 2/1/2023 | 31,385 | 574,346 | 0 | 0 | | | 2/1/2023 | 0 | 0 | 70,613 | 1,292,209 | | | 2/1/2024 | 66,302 | 1,213,327 | 0 | 0 | | | 2/1/2024 | 0 | 0 | 99,456 | 1,820,045 | | Steven F. Campbell | 2/1/2022 | 13,986 | 255,944 | 0 | 0 | | | 2/1/2023 | 32,220 | 589,626 | 0 | 0 | | | 2/1/2023 | 0 | 0 | 72,492 | 1,326,604 | | | 2/1/2024 | 77,351 | 1,415,523 | 0 | 0 | | | 2/1/2024 | 0 | 0 | 116,028 | 2,123,312 | | Anthony C. Green | 2/1/2022 | 14,569 | 266,613 | 0 | 0 | | | 2/1/2023 | 31,385 | 574,346 | 0 | 0 | | | 2/1/2023 | 0 | 0 | 70,613 | 1,292,209 | | | 2/1/2024 | 57,461 | 1,051,536 | 0 | 0 | | | 2/1/2024 | 0 | 0 | 86,193 | 1,577,332 |

  67. 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:

  68. Outstanding Equity Awards at Fiscal Year-End

    | Grant Date | Remaining Vesting Date(s) | | 2/1/2022 | February 1, 2025 | | 2/2/2023 | February 1, 2025 and 2026 | | 2/1/2024 | February 1, 2025, 2026 and 2027 |

  69. 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 2024, the number of PSUs shown in the table assumes maximum (150%) payouts for 2023 and 2024 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 and are generally subject to continued employment through the applicable vesting date.

  70. Stock Vested in 2024

    Stock Vested in 2024 The following table sets forth certain information with respect to our NEOs regarding stock vested during the year ended December 31, 2024.

  71. Stock Vested in 2024

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting(1) (#) | Value Realized on Vesting(2) ($) | | David L. Finkelstein | 354,652 | 6,940,546 | | Serena Wolfe | 46,566 | 911,288 | | Steven F. Campbell | 88,165 | 1,725,395 | | Anthony C. Green | 93,591 | 1,831,574 |

  72. Stock Vested in 2024

    (1) Reflects previously granted 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 2024 may be paid during 2025, when performance results were certified or as the result of certain payment delays required by U.S. tax laws.

  73. 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 2024. 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 2024 (subject to limits set forth in the Internal Revenue Code). Such matching contributions are immediately vested.

  74. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control

  75. QUANTIFICATION OF TERMINATION PAYMENTS

    | Name | Potential Payments | Termination by Company Without Cause (Other than within Two Years of Change in Control) ($) | Termination by Company Without Cause (within Two Years of a Change in Control)(2) ($) | Death ($) | Disability ($) | Retirement(3) ($) | Termination by Company for Cause or Voluntary Termination by Executive (with or without Good Reason, not Retirement) ($) | | David L. Finkelstein | Severance | 12,000,000 | 12,000,000 | 0 | 0 | 0 | 0 | | | Bonus | 8,483,650 | 8,483,650 | 0 | 0 | 0 | 0 | | | Accelerated Equity Awards(1) | 19,116,244 | 19,116,244 | 15,276,145 | 19,116,244 | 0 | 0 | | | Benefits | 0 | 0 | 0 | 0 | 0 | 0 | | | TOTAL | 39,599,894 | 39,599,894 | 15,276,145 | 19,116,244 | 0 | 0 | | Serena Wolfe | Severance | 3,750,000 | 3,750,000 | 0 | 0 | 0 | 0 | | | Bonus | 2,723,200 | 2,723,200 | 0 | 0 | 0 | 0 | | | Accelerated Equity Awards(1) | 5,006,596 | 5,006,596 | 3,969,179 | 5,006,596 | 0 | 0 | | | Benefits | 0 | 0 | 0 | 0 | 0 | 0 | | | TOTAL | 11,479,796 | 11,479,796 | 3,969,179 | 5,006,596 | 0 | 0 | | Steven F. Campbell | Severance | 4,218,750 | 4,218,750 | 0 | 0 | 0 | 0 | | | Bonus | 3,078,650 | 3,078,650 | 0 | 0 | 0 | 0 | | | Accelerated Equity Awards(1) | 5,711,009 | 5,711,009 | 4,561,037 | 5,711,009 | 0 | 0 | | | Benefits | 0 | 0 | 0 | 0 | 0 | 0 | | | TOTAL | 13,008,409 | 13,008,409 | 4,561,037 | 5,711,009 | 0 | 0 | | Anthony C. Green | Severance | 3,375,000 | 3,375,000 | 0 | 0 | 0 | 0 | | | Bonus | 2,287,000 | 2,287,000 | 0 | 0 | 0 | 0 | | | Accelerated Equity Awards(1) | 4,762,035 | 4,762,035 | 3,805,522 | 4,762,035 | 4,762,035 | 0 | | | Benefits | 0 | 0 | 0 | 0 | 0 | 0 | | | TOTAL | 10,424,035 | 10,424,035 | 3,805,522 | 4,762,035 | 4,762,035 | 0 |

  76. 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 Co-Chief Investment Officer. For 2024, our last completed fiscal year: ▪ the annual total compensation of our median employee was $295,000, and ▪ the annual total compensation of the CEO as reported in the Summary Compensation Table included in this Proxy Statement was $17,825,542. Based on this information, for 2024, the CEO’s annual total compensation was 60 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.

  77. 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 57 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 the past five fiscal years. 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.

  78. Pay Versus Performance

    | (a) | (b) | | (c) | | (d) | (e) | (f) | (g) | (h) | (i) | | Year | 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) (%) | | | D. Finkelstein(2) ($) | G. Votek(3) ($) | D. Finkelstein(2) ($) | G. Votek(3) ($) | | | TSR(7) ($) | Peer Group TSR(8) ($) | | | | 2024(11) | 17,825,542 | 0 | 21,381,925 | 0 | 5,833,893 | 6,788,368 | 93.67 | 71.02 | 1,011,768 | 11.9 | | 2023 | 15,327,300 | 0 | 16,790,236 | 0 | 4,936,439 | 5,299,208 | 86.79 | 66.78 | (1,638,457) | 6.1 | | 2022 | 14,323,682 | 0 | 11,087,169 | 0 | 5,420,097 | 4,916,762 | 82.75 | 57.06 | 1,726,420 | (23.7) | | 2021 | 9,138,764 | 0 | 9,511,494 | 0 | 3,882,162 | 4,027,576 | 105.00 | 79.47 | 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 | 68.45 | (889,772) | 1.6 |

  79. 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 in the most recent fiscal year to determine the compensation actually paid:

  80. Pay Versus Performance

    | Year | Reported Summary Compensation Table Total ($) | Reported Value of Equity Awards(a) ($) | Adjusted Equity Value(b) ($) | Compensation Actually Paid ($) | | 2024 | 17,825,542 | (8,328,092) | 11,884,475 | 21,381,925 |

  81. 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 includes 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; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values for the equity values set forth in the table below did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the adjusted equity value are as follows:

  82. Pay Versus Performance

    | Year | Year End Fair Value of Outstanding and Unvested Equity Awards Granted in the Year ($) | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | Value of Dividends or Other Earnings Paid on Stock or Option Awards Not Otherwise Reflected in Fair Value or Total Compensation ($) | Total Equity Award Adjustments ($) | | 2024 | 8,605,410 | (4,923,186) | 0 | 5,844,494 | 0 | 2,357,756 | 11,884,475 |

  83. Pay Versus Performance

    (5) The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s Non-PEO NEOs, which include the Company’s NEOs as a group (excluding Messrs. Finkelstein and Votek), in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the Non-PEO NEOs in each applicable year are as follows:

  84. 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.

  85. COMPENSATION ACTUALLY PAID AND CUMULATIVE TSR

    COMPENSATION ACTUALLY PAID AND CUMULATIVE TSR The graph below presents the relationship between the amount of compensation actually paid (“CAP”) to our PEO and the average amount of CAP to the Non-PEO NEOs with our cumulative TSR over the last five fiscal years. In 2020, we had two PEOs, Mr. Finkelstein and Mr. Votek. As described in the CD&A, we utilize a TSR governor in our PSU design, which limits payout opportunity if TSR for the performance period is negative.

  86. COMPENSATION ACTUALLY PAID AND GAAP NET INCOME

    COMPENSATION ACTUALLY PAID AND GAAP NET INCOME The graph below presents the relationship between the amount of CAP to our PEO and the average amount of CAP to the Non-PEO NEOs with our GAAP net income for the last five fiscal years. In 2020, we had two PEOs, Mr. Finkelstein and Mr. Votek. 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.

  87. COMPENSATION ACTUALLY PAID AND TANGIBLE ECONOMIC RETURN

    COMPENSATION ACTUALLY PAID AND TANGIBLE ECONOMIC RETURN The graph below presents the relationship between the amount of CAP to our PEO and the average amount of CAP to the Non-PEO NEOs, with our Tangible Economic Return for the last five fiscal years. In 2020, we had two PEOs, Mr. Finkelstein and Mr. Votek. As described in the CD&A, we utilize Relative Tangible Economic Return for the respective performance period to determine 37.5% of annual incentive amounts for 2024 and 2023 (and 30% 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 2024 to Company performance. SAY-ON-PAY VOTE

  88. COMPENSATION ACTUALLY PAID AND TANGIBLE ECONOMIC RETURN

    | | ADVISORY APPROVAL OF EXECUTIVE COMPENSATION |

  89. 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.

  90. 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. |

  91. 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. |

  92. COMPENSATION ACTUALLY PAID AND TANGIBLE ECONOMIC RETURN

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

  93. 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, 2025, 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.

  94. 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, 2025. |