AGNC Investment Corp PRE 14A, filed Feb 22, 2022

AGNC Investment Corp. (AGNC)

PRE 14A 2022-02-22 For: 2021-12-31

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☒			Preliminary Proxy Statement

☐			Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☐			Definitive Proxy Statement

☐			Definitive Additional Materials

☐			Soliciting Material Pursuant to §240.14a-12


			Payment of Filing Fee (Check the appropriate box):

☒			No fee required

☐			Fee paid previously with preliminary materials

☐			Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11


DATE AND TIME:	Thursday, April 21, 2022, at 9:00 a.m., Eastern Time

WHERE:	Due to the ongoing Covid-19 pandemic, the Annual Meeting will be held only in a virtual format to support the health of our stockholders, employees, and community. The virtual meeting site is www.virtualshareholdermeeting.com/AGNC2022.

ITEMS OF BUSINESS:	1)	To elect the Board of Directors, with each director serving a one-year term and until his or her successor is elected and qualified;

	2)	To approve an advisory resolution on executive compensation;

	3)	To consider and vote upon the ratification of the appointment of Ernst & Young LLP to serve as our independent public accountant for the year ending December 31, 2022;

	4)	To consider and vote upon amendments to our Amended and Restated Certificate of Incorporation (the "Certificate of Incorporation") eliminating supermajority voting requirements for stockholders to:
		A.amend certain provisions of our Certificate of Incorporation;
		B. amend our Fourth Amended and Restated Bylaws ("Bylaws"); and
		C. remove directors; and


	5)	To transact such other business as may properly come before the meeting or any postponement or adjournment thereof.

	Stockholders will have an opportunity to submit questions in advance of and during the meeting.

WHO CAN VOTE:	You are entitled to notice of, and to vote at, the Annual Meeting and any postponement or adjournment of the Annual Meeting if you were a common stockholder of record at the close of business on February 25, 2022.

MEETING DETAILS:	Attendance at the meeting is limited to holders of common stock as of the close of business on February 25, 2022. For details regarding our virtual annual meeting, including how to attend and how to submit questions, see Questions 14 and 15 of “Questions and Answers About the 2022 Annual Meeting and Voting” in this proxy statement.

DATE OF DISTRIBUTION:	This notice, the proxy statement, the accompanying proxy card, and our annual report to stockholders, which includes our annual report on Form 10-K with audited financial statements for the year ended December 31, 2021, are first being sent to our common stockholders on or about March , 2022.


Proposal	Board Recommendation	Page
Proposal 1: Election of Directors	FOR	11

Proposal 2: Advisory Resolution to Approve Executive Compensation	FOR	16

Proposal 3: Ratification of Appointment of Independent Public Accountant	FOR	17

Proposal 4: Amendments to our Certificate of Incorporation eliminating supermajority voting requirements		20
A.Amendments to certain provisions of our Certificate of Incorporation	FOR	20
B. Amendments to our Bylaws	FOR	20
C. Removal of directors	FOR	21


Engagement Themes
Executive Leadership Transitions			ØGiven the ample lead time for market participants to digest the December 2020 announcement coupled with the detailed disclosure, investors noted that the transition occurred seamlessly

Board Composition			ØInvestors voiced an appreciation for our board refreshment efforts, particularly around enhanced diversity and the increased size

ESG Initiatives			ØDiscussions with investors focused on our Board of Directors' oversight of ESG matters, and investors valued our enhanced ESG disclosure despite the ongoing limitations for reporting by Agency mortgage REITs ØInvestors reacted favorably to our stated intentions to provide disclosure consistent with the Task Force on Climate-Related Financial Disclosures ("TCFD") framework

COVID Response			ØAGNC continues to prioritize the health and welfare of our employees and remains flexible regarding remote and hybrid work environments ØTo facilitate our hybrid work environment, we continue to enhance AGNC's cybersecurity platform and information technology support


IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 21, 2022 This proxy statement and our annual report to stockholders, which includes our annual report on Form 10-K for the fiscal year ended December 31, 2021, are available free of charge on the internet at www.AGNC.com/2022proxymaterials.


Proxy Summary			i
Board and Governance Matters			1
Board Leadership Structure			1
Corporate Governance			2
Committees of the Board of Directors			4
Board and Committee Meetings			4
Director Nomination Process			4
Board Membership Criteria			4
Oversight of Strategy and Key Risks			5
ESG and Corporate Responsibility			7
Director Compensation			7
Stock Ownership Guidelines			9
Director Resignation Policy			9
Certain Transactions with Related Persons			10
Compensation Committee Interlocks and Insider Participation			10
Proposal 1: Election of Directors			11
Summary of our Board’s Industry and Functional Expertise			11
Director Nominee Biographies and Qualifications			11
Conclusion and Recommendation; Vote Required			15
Proposal 2 : Advisory Resolution to Approve Executive Compensation			16
General Information			16
Conclusion and Recommendation; Vote Required			16
Proposal 3 : Ratification of Appointment of Independent Public Accountant			17
Independent Public Accountant’s Fees			17
Pre-Approval Policy			17
Conclusion and Recommendation; Vote Required			18
Report of the Audit Committee			19
Proposal 4 : Approval of Amendments to Our Amended and Restated Certificate of Incorporation Eliminating Supermajority Voting Requirements			20
General Information			20
Proposal 4 A: Amendment to Eliminate the Supermajority Voting Standard for Certain Amendments to O ur Certificate of Incorporation			20
Proposal 4B : Amendment to Eliminate the Supermajority Voting Standard for Amendments to Our Bylaws			20
Proposal 4 C: Amendment to Eliminate the Supermajority Voting Standard for Removal of Directors			21
Conclusion and Recommendation; Vote Required			21
Executive Officers of Registra nt			22
Executive Officer Biographies			22
Executive Compensation			24


Compensation Discussion and Analysis			24
202 1 Named Executive Officers			24
Executive Summary			24
Business Overview			24
Our Business in the Context of Our Broader Industry			25
Recent Performance			26
Compensation Philosophy and Objectives			28
Stockholder Engagement			30
Compensation Governance Practices			32
Compensation Program In Detail			32
Compensation Program Elements			32
Corporate Scorecard for Calculating Annual Bonus			33
Equity Incentive Compensation			38
Compensation Decision Process			40
Other Compensation Policies and Practices			43
Report of the Compensation and Corporate Governance Committee			44
202 1 Summary Compensation Table			45
Grants of Plan-Based Awards in Fiscal Year 2021			46
Outstanding Equity Awards at 202 1 Fiscal Year-End			46
Option Exercises and Stock Vested for Fiscal Year 2021			48
Severance and Change of Control Payments			48
CEO Compensation Pay Ratio			51
Information Regarding Company Voting Securities			52
Security Ownership of Management and Certain Beneficial Owners			52
Questions and Answers About Stockholder Communications and Proposals			53
Questions and Answers About the 202 2 Annual Meeting and Voting			54
Appendix I: Proposed Amended Provisions of O ur Certificate of Incorporation			1


Responsibilities and Collaboration Among our Lead Independent Director and Executive Chair

Lead Independent Director and Vice Chair						Executive Chair
•elected by and acts as leader of independent directors •chairs meetings of the independent directors and the Executive Committee and chairs meetings of the Board of Directors when the Executive Chair is not present or is recused •serves on all Board committees to facilitate support of committee chairs and coordination of committee work •able to call meetings of the independent directors and special meetings of the Board of Directors •collaborates with the Executive Chair, the CEO, the Secretary and committee chairs to approve scheduling of meetings, development of agendas, and review content and distribution of materials •serves as a liaison between management and the independent directors and ensures that the information needs of independent directors are satisfied •together with the chair of the Compensation Committee, leads the performance evaluation of the Executive Chair and the Chief Executive Officer •together with the Executive Chair, facilitates identification and resolution of potential conflicts of interest and establishes expectations regarding culture of compliance throughout the Company •communicates on behalf of the independent directors with stockholders, proxy advisory firms, and other stakeholders, as necessary						•elected by all directors •chairs all regular and special meetings of the Board •serves on the Executive Committee •serves as an additional management resource in the event of a crisis or interruption in business continuity •together with the Vice Chair, facilitates identification and resolution of potential conflicts of interest and establishes expectations regarding culture of compliance throughout the Company •collaborates with the Lead Independent Director, CEO, Secretary, and committee chairs to call and schedule Board meetings, develop agendas, and review the content and distribution of materials •as necessary, represents the Company to stockholders, other stakeholders, and government officials in conjunction with the Chief Executive Officer •provides transitional support and guidance to the Chief Executive Officer and Chief Investment Officer, including consultation on significant strategic decisions •evaluates and reports to the independent directors as requested regarding the Chief Executive Officer's performance and development



CORPORATE GOVERNANCE HIGHLIGHTS
•Annual election of directors •Directors elected by majority voting, with a resignation policy for directors who do not receive a majority support •Five of nine directors are gender or racially diverse •Chair is separate from the CEO •Robust independent Board leadership, with Lead Independent Director also serving as Vice Chair •All directors serve on the boards of two or fewer public companies or mutual fund complexes •Four new independent directors added since 2018 and average Board tenure of 4.8 years •Regular meetings of independent directors without members of management •Stock ownership guidelines for directors and executive officers •Stockholder engagement program, including participation by independent directors •Anti-hedging and pledging policy for directors and executive officers •Clawback policy for incentive compensation •No stockholder rights plan or “poison pill” •Comprehensive Code of Ethics and Conduct and Corporate Governance Guidelines •Annual board and committee self-evaluations •100% attendance at all of our Board and committee meetings in 2021 •Membership in the National Association of Corporate Directors (the “NACD”), a leading authority on corporate boardroom and governance practices


Board Diversity Matrix (As of February 25, 2022)
	Female	Male	Non-Binary	Did Not Disclose Gender
Part I: Gender Identity
Directors	3	6	0	0
Part II: Demographic Background
African American or Black	0	2	0	0
Alaskan Native or Native American	0	0	0	0
Asian	0	0	0	0
Hispanic or Latinx	0	0	0	0
Native Hawaiian or Pacific Islander	0	0	0	0
White	3	4	0	0
Two or More Races or Ethnicities	0	0	0	0
LGBTQ+	0	0	0	0
Did Not Disclose Demographic Background	0


Name	Fees Earned or Paid in Cash ($)	Stock Awards ($) 1	Total ($)
Donna J. Blank	137,500	147,500	285,000
Morris A. Davis	137,500	147,500	285,000
John D. Fisk	112,500	147,500	260,000
Andy A. Johnson, Jr. 2	22,077	—	22,077
Prue B. Larocca	187,500	147,500	335,000
Paul E. Mullings	112,500	147,500	260,000
Frances R. Spark	112,500	147,500	260,000



						DONNA J. BLANK, 60
						Professional Experience: Ms. Blank is a finance executive with over 30 years of financial and operational experience, primarily in financial services. From 2015 through 2016, she was Chief Financial Officer at ZAIS Group, LLC, an alternative asset manager. While at ZAIS, Ms. Blank also served as the Chief Financial Officer of its externally managed publicly traded residential mortgage REIT and its public holding company. Prior to her role at ZAIS, she served as Chief Financial Officer and Executive Vice President at NFP Corp., a publicly traded insurance brokerage, from 2008 until 2013. From 2003 to 2008, Ms. Blank was Chief Financial Officer at Financial Guaranty Insurance Company, both before and subsequent to its sale by GE Capital to an investor group in late 2003. She has served as an independent director and member of the Audit Committee at American Enterprise Mutual Holding Company since March 2018 and has also served as chair of the Audit Committee since March 2020. Ms. Blank holds an MBA in Finance and a Master of International Affairs, both from Columbia University. Ms. Blank is an “audit committee financial expert” (as defined in Item 407 of Regulation S-K under the Securities Act). Director Qualifications: Ms. Blank’s extensive public company accounting and operational experience in the financial services sector, including her senior executive role at a publicly traded residential mortgage REIT, strengthens our Board’s collective qualifications, skills, experience, and viewpoints.



						MORRIS A. DAVIS, 50
						Professional Experience: Dr. Davis is the Paul V. Profeta Chair of Real Estate and Academic Director of the Center for Real Estate at Rutgers Business School, where he has worked since September 2014. Dr. Davis is also currently an Adjunct Scholar at the American Enterprise Institute and is a Senior Scholar of the Opportunity and Inclusive Growth Institute of the Federal Reserve Bank of Minneapolis. Previously, Dr. Davis was the James A. Graaskamp Chair of Real Estate in the Department of Real Estate at the University of Wisconsin-Madison, where he worked from September 2006 through August 2014. Dr. Davis was also the Academic Director of the James A. Graaskamp Center for Real Estate at the University of Wisconsin-Madison. From July 2002 to August 2006, Dr. Davis was an economist at the Federal Reserve Board working in the Flow of Funds Section. From October 2001 to July 2002, he was Director of Yield Optimization at Return Buy, Inc. and from August 1998 to October 2001, Dr. Davis was an economist at the Macroeconomics and Quantitative Studies Section of the Federal Reserve Board. Dr. Davis also served on the board of directors of the SkyBridge Opportunity Zone Real Estate Investment Trust, Inc., a private REIT, from November, 2018 until September, 2019 where he was the chair of the valuation committee. Dr. Davis was also formerly on the Academic Advisory Council of the Federal Reserve Bank of Chicago and served as a Research Associate at the Federal Reserve Bank of Cleveland. Dr. Davis is widely published on issues related to the U.S. housing markets and a frequent lecturer. He holds a Ph.D. in Economics from the University of Pennsylvania. Director Qualifications: Dr. Davis’s extensive expertise in economics, housing policy, and finance matters strengthens our Board’s collective qualifications, skills, experience, and viewpoints.



						PETER J. FEDERICO, 55
						Professional Experience: Mr. Federico has served as a Director and our Chief Executive Officer since July 2021 and as our President since March 2018. He previously served as our Chief Operating Officer from March 2018 until July 2021, as Executive Vice President and Chief Financial Officer from July 2016 until March 2018, and as Senior Vice President and Chief Risk Officer from June 2011 until our internalization in July 2016. Prior to joining AGNC Investment Corp., Mr. Federico served as Executive Vice President and Treasurer of Freddie Mac from October 2010 through May 2011, where he was primarily responsible for managing the company’s investment activities for its retained portfolio and developing, implementing, and managing risk mitigation strategies. He was also responsible for managing Freddie Mac’s $1.2 trillion interest rate derivative portfolio and short- and long-term debt issuance programs. Mr. Federico also served in a number of other capacities at Freddie Mac, including as Senior Vice President, Asset & Liability Management, during his tenure with the company, which began in 1988. Director Qualifications: Mr. Federico’s knowledge and understanding of our business as our President and Chief Executive Officer and his expertise in risk mitigation strategies strengthens our Board’s collective qualifications, skills, experience, and viewpoints.


AGNC INVESTMENT CORP. AT A GLANCE


AGNC INVESTMENT CORP. AT A GLANCE


AGNC INVESTMENT CORP. AT A GLANCE


AGNC INVESTMENT CORP. - Proxy Statement			iii



						JOHN D. FISK, 65
						Professional Experience: Mr. Fisk retired in March 2019 as the Chief Executive Officer of the FHLBanks Office of Finance, a division of the Federal Home Loan Banks that issues and services all debt securities for the regional Federal Home Loan Banks, supporting borrowings of $1 trillion. Mr. Fisk had previously served as the Deputy Managing Director and Chief Operating Officer of the FHLBanks Office of Finance from 2004 until 2007 when he became the Chief Executive Officer. Prior to joining the FHLBanks Office of Finance, Mr. Fisk was the Executive Vice President of Strategic Planning at MGIC Investment Corporation, one of the nation’s largest providers of mortgage insurance, from 2002 until 2004. Mr. Fisk also serves on the Board of Directors of Enact Holdings, Inc., where he chairs the Risk Committee and is a member of the Independent Capital Committee. Mr. Fisk holds an MBA in Finance and Public Management from The Wharton School at the University of Pennsylvania and a BA from Yale University. Director Qualifications: Mr. Fisk’s expertise in the US housing sector, including debt issuance and mortgage insurance, and his senior executive officer experience overseeing human capital management strengthens our Board’s collective qualifications, skills, experience, and viewpoints.



						ANDREW A. JOHNSON, JR., 59
						Professional Experience: Mr. Johnson is an investment professional with over 20 years’ experience leading teams focused on fixed income investments. Mr. Johnson served as Managing Director, Head of Global Investment Grade Fixed Income and Chief Investment Officer for Neuberger Berman Investment Advisers, LLC and Neuberger Berman Fixed Income LLC from 2009 to 2019. He retired from his role as Managing Director and Chief Investment Officer in 2019 and transitioned to the role of Senior Diversity and Inclusion Leader at Neuberger Berman Services. In his current position, Mr. Johnson leads the firm’s efforts to improve diversity and inclusion in the workforce across Neuberger Berman entities. Prior to his roles at Neuberger Berman, from 2003 to 2009 Mr. Johnson was a Managing Director, Co-Head Investment Grade Fixed Income and Chief Investment Officer at Lehman Brothers Asset Management, LLC. He currently serves as a Non-Interested Trustee on the Board of Trustees of certain mutual funds advised by Hartford Mutual Funds, Inc. Mr. Johnson holds an MBA in Finance from the University of Chicago and a MSEE and BSEE from Illinois Institute of Technology. Director Qualifications: Mr. Johnson’s extensive background in fixed income investments and his experience working to improve diversity and inclusion in the workforce strengthens our Board’s collective qualifications, skills, experience, and viewpoints.



						GARY D. KAIN, 57
						Professional Experience: Mr. Kain has served as the Executive Chair of our Board of Directors since July 2021 and has been a Director since March 2016. Previously, he was our Chief Executive Officer from March 2016 until July 2021, Chief Investment Officer from January 2009 until July 2021, and President from April 2011 until March 2018. Prior to joining AGNC Investment Corp., Mr. Kain was Senior Vice President of Investments and Capital Markets of Freddie Mac from May 2008 to January 2009. He also served as Senior Vice President of Mortgage Investments & Structuring of Freddie Mac from February 2005 to April 2008, during which time he was responsible for managing all of Freddie Mac’s mortgage investment activities for the company’s $700 billion retained portfolio. From 2001 to 2005, Mr. Kain served as Vice President of Mortgage Portfolio Strategy at Freddie Mac. From 1995 to 2001, he was the head trader in Freddie Mac’s Securities Sales & Trading Group, where he was responsible for managing all trading decisions including REMIC structuring and underwriting, hedging all mortgage positions, income generation, and risk management. Prior to that, he served as a senior trader, responsible for managing the adjustable-rate mortgage and REMIC sectors. Mr. Kain previously served as a Director and Chief Executive Officer of MTGE Investment Corp. (Nasdaq: MTGE) from March 2016 until May 2018 and as Chief Investment Officer from March 2011 until May 2018. In addition, he served as President from March 2011 until March 2018 of MTGE. Director Qualifications: Mr. Kain’s extensive and lengthy expertise in the Agency mortgage sector and his deep knowledge of our business as our Chief Executive Officer and Chief Investment Officer strengthens our Board’s collective qualifications, skills, experience, and viewpoints.



						PRUE B. LAROCCA, 70
						Professional Experience: Ms. Larocca has served as our Lead Independent Director since May 2016 and has served as our Vice Chair since July 2021. She previously served as our Chair from May 2016 until July 2021. She is a retired investment banking executive and a widely recognized expert in the areas of housing finance and securitization. Ms. Larocca previously served as a member of the board of the Housing Preservation Foundation, the Washington School for Girls, and the American Securitization Trade Association. Ms. Larocca was a Managing Director of Royal Bank of Scotland (“RBS”) in the Mortgage Backed and Asset Backed Finance Group from 1997 until her retirement from RBS in 2011. Prior to joining RBS, Ms. Larocca was a Senior Vice President at Lehman Brothers in the mortgage finance business, managed the consumer and single-family securitization business for the Resolution Trust Corporation, and practiced law with the firms of Milbank, Tweed, Hadley and McCloy and Kutak Rock. She is a graduate of the Georgetown University Law Center and Indiana University. Director Qualifications: Ms. Larocca’s extensive and lengthy expertise in mortgage finance and asset securitization strengthens our Board’s collective qualifications, skills, experience, and viewpoints.



						PAUL E. MULLINGS, 71
						Professional Experience: Mr. Mullings has over 40 years’ experience in the mortgage banking sector. Mr. Mullings served from 2015 until his retirement in 2020 as a Managing Director of The Collingwood Group, a SitusAMC company, a business advisory and risk management firm focused on the financial services industry. From 2005 to 2015, Mr. Mullings served as a Senior Vice President of Freddie Mac in the Single-Family Business division. While at Freddie Mac, he also served on the Operating, Management and Credit Risk Committees. Prior to joining Freddie Mac, Mr. Mullings was a Senior Vice President at J.P. Morgan Chase & Co. from 1997 to 2005 in the home finance area. Previously, Mr. Mullings was the President and Chief Executive Officer of the Mortgage Electronic Registration Systems, Inc. (MERS) and the President and Chief Executive Officer of the Residential Mortgage Division of the First Interstate Bank in Los Angeles. Mr. Mullings received his Overseas Certificate in Business Studies from the College of Arts, Science and Technology in Kingston, Jamaica, following which he became a Member of The Institute of Accounting Staff in conjunction with the Association of Certified Accountants in London, England. Director Qualifications: Mr. Mullings’ extensive senior executive officer experience in the mortgage banking sector and the secondary mortgage market strengthens our Board’s collective qualifications, skills, experience, and viewpoints.



						FRANCES R. SPARK, 63
						Professional Experience: Ms. Spark is an experienced finance professional with broad expertise in mortgage finance and financial reporting for publicly traded companies, including mortgage REITs. Ms. Spark served as the Chief Financial Officer and Treasurer for CYS Investments, Inc., a publicly traded mortgage REIT that invested predominantly in Agency MBS, from 2009 through 2016. Prior to the internalization of CYS’s management in 2011, Ms. Spark also served as the Chief Financial Officer and Treasurer of CYS’s external manager, Sharpridge Capital Management, LP. She had served as a director and Audit Committee chair of CYS from its initial capitalization in 2006 until shortly after its initial public offering. Prior to CYS, Ms. Spark was the Chief Financial Officer for MVC Capital, Inc., a business development company, from 2003 until 2005. Ms. Spark’s career has included managing Spark Consulting, a privately owned strategic advisory and business consulting firm, and executive positions with financial services firms in the United States and the United Kingdom. She also served as an independent director and a member of the Audit and Risk Committees of Reverse Mortgage Investment Trust, a private finance company operating in the reverse mortgage industry, from 2015 to 2020. Ms. Spark is a Chartered Accountant and previously worked as an auditor with KPMG in the United Kingdom. She holds a BS from the University of Southampton in the United Kingdom. Ms. Spark is an “audit committee financial expert” (as defined in Item 407 of Regulation S-K under the Securities Act). Director Qualifications: Ms. Spark’s public company accounting, finance, and risk management expertise in the mortgage REIT sector, including her role as a senior executive officer at a publicly traded residential mortgage REIT, strengthens our Board’s collective qualifications, skills, experience, and viewpoints.


	2021	2020
Audit Fees	$1,756,000	$1,559,500
Audit-Related Fees	—	—
Tax Fees	82,680	123,699
All Other Fees	—	—
Total Fees	$1,838,680	$1,683,199


PROPOSAL 4: APPROVAL OF AMENDMENTS TO OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION ELIMINATING CERTAIN SUPERMAJORITY VOTING REQUIREMENTS


Name			Title
Peter J. Federico			President and Chief Executive Officer
Gary D. Kain			Executive Chair, Formerly Chief Executive Officer and Chief Investment Officer*
Christopher J. Kuehl			Executive Vice President and Chief Investment Officer
Bernice E. Bell			Executive Vice President and Chief Financial Officer
Aaron J. Pas			Senior Vice President, Non-Agency Portfolio Investments
Kenneth L. Pollack			Executive Vice President, General Counsel, Chief Compliance Officer, and Secretary



2021 Performance Highlights:
AGNC significantly outperformed our Agency REIT Peer Group1 on both an economic and total stock return basis despite the substantial volatility in 2021 driven by the continuing Pandemic and speculation regarding the ultimate path of Federal Reserve monetary policy actions, including reductions in asset purchases, interest rate hikes, and balance sheet normalization. In addition, while our primary focus remains on generating risk-adjusted returns for our stockholders, AGNC executed upon a number of strategic and operational initiatives in 2021 to enhance our franchise value. Highlights of our financial performance in 2021 include: •Annual economic return of 2.9%, which was the highest economic return within our Agency REIT Peer Group and materially exceeded our Agency REIT Peer Group average return of -6.7% in 2021 •1-, 3- and 5-year annualized total stock returns of 5%, 5%, and 7%, respectively, significantly better than the Agency REIT Peer Group average, which generated negative total stock returns over each corresponding period at -1%, -10%, and -4%, respectively •Operating Expenses for 2021 were 0.81% as a percentage of Stockholders’ Equity, the lowest among residential mortgage REITs and a fraction of the average of our Agency REIT Peer Group at 2.53% for the twelve-month period ended September 30, 2021, the most recent date for which sufficient data is available In addition to our strong financial performance relative to our Agency REIT Peer Group, we also completed or advanced a number of strategic and operational initiatives in 2021: •Completed our previously announced management succession on July 1 without disruption •Published our inaugural ESG report in March, providing insight into our commitment to the core principles of ESG and approach to key ESG topics such as human capital management, diversity and inclusion, business ethics, risk management, corporate governance, and environmental stewardship •Conducted significant outreach and engaged with the investment community (including current stockholders), ESG rating agencies and other stakeholders regarding our ESG report and practices and continued our annual Fall engagement campaign with institutional investors and proxy advisors on governance, executive compensation, and other topics •Took significant actions to enhance employee development, engagement, health, and well-being as the Pandemic entered its second year •Enhanced our IT infrastructure, including migration to the cloud, to bolster information security and enhance AGNC’s hybrid work model •Established custody clearing / settlement services at AGNC’s captive broker-dealer, generating substantial cost savings and reducing exposure to third-party custodial operations •Repurchased $257 million2 of common stock at meaningful discounts to tangible net book value In recognition of AGNC’s investor relations and employee engagement efforts, AGNC received the 2021 Nareit Gold Investor CARE Award and was certified as a “Great Place to Work™.”



Pay-for-Performance			Link compensation to achievement of short- and long-term financial and strategic goals

Attraction and Retention			Attract and retain a high-quality team with skills necessary to outperform industry peers and achieve AGNC’s strategic objectives

Alignment with Stockholders			Align the interests of executive officers, employees, and stockholders by tying elements of realized compensation to stockholder value

Financial Efficiency			Maintain a low-cost operating structure that maximizes financial efficiency from a tax, accounting, and cash flow perspective

Strong Compensation Governance			Employ high quality practices in governance of executive compensation


NEO	2021 Base Salary	2022 Base Salary
Peter J. Federico	$900,000	$900,000
Gary D. Kain	$700,000 1	$500,000
Christopher J. Kuehl	$900,000	$900,000
Bernice E. Bell	$500,000	$500,000
Aaron J. Pas	$450,000	$450,000
Kenneth L. Pollack	$500,000	$500,000


NEO	2021 Target Annual Bonus	2022 Target Annual Bonus
Peter J. Federico	$2,700,000 1	$3,600,000
Gary D. Kain	$4,500,000 2	$3,600,000
Christopher J. Kuehl	$1,800,000 3	$2,000,000
Bernice E. Bell	$1,000,000	$1,250,000
Aaron J. Pas	$787,500	$900,000
Kenneth L. Pollack	$850,000	$1,000,000


			Performance Continuum
Category Weight	Performance Metric	Metric Weight	Below Threshold	Threshold	Target	Out- performance
75%	Absolute Economic Return(1)	25.0%	< 0.0%	0.0%	10.0%	≥ 17.0%
	Economic Return vs. Peer Index(1)(2)	25.0%	< (5.0%)	(5.0%)	1.0%	≥ 5.5%
	Price-to-Tangible Book Ratio vs. Peer Index(2)	25.0%	< (6.5%)	(6.5%)	3.5%	≥ 11.0%
			Payout Continuum (% of Metric Weight)
			0%	50%	100%	150%


Strategic and Operational Metrics (25% of Total Corporate Scorecard)


Index	Index Weight	Index Payout	Weighted Payout
Financial Metrics	75%	96.7%	72.5%
Strategic / Operational Metrics	25%	100.0%	25.0%
Corporate Scorecard Payout			97.5%


Component of Value Proposition	Objective / Focus	Highlights
Highly Efficient Operating Cost Structure	ü Maintain low operating cost structure relative to the residential mortgage REIT and broader asset management industries, a significant benefit of AGNC’s internal management structure that enhances return potential for investors	ü Continued to out perform mREIT industry on an operating cost basis by a wide margin ü Negotiated materially lower haircuts on repurchase agreement financing ü Established custody clearing / settlement services at Bethesda Securities, our wholly-owned broker dealer, generating substantial cost savings and reducing exposure to third-party custodian operations
Disciplined Risk Management	ü Mitigate risk through AGNC’s comprehensive risk management framework, which is predicated on careful asset selection, disciplined hedging, and diversified funding, with the goal of preserving tangible net book value across market scenarios over the long-term, and on operational performance	ü Maintained compliance with all reporting, listing, and REIT regulatory requirements ü Implemented new and more efficient processes, including new pricing process for non-Agency securities, reporting framework, and REIT compliance testing ü Implemented significant IT infrastructure enhancements that bolster information security and a hybrid work model ü Completed first office reopening phase in July for voluntary hybrid work option
Stockholder Focus	ü Provide detailed and transparent public financial disclosure, actively engage with investors, and incorporate high quality corporate environmental, social, and governance practices into AGNC's strategy, business, and operations ü Maintain investor confidence during executive management transition	ü Managed succession of CEO and CIO positions without internal or external disruption ü Enhanced investor outreach to retail investors through retail networks ü Made significant progress on branding and website development ü Engaged institutional and other stakeholders on ESG topics ü Published first annual ESG report and disclosures consistent with SASB reporting framework
Liquidity and Scale	ü Continue active, stockholder-friendly capital management approach that is consistent with broader market considerations	ü Implemented new shelf registration and updated ATM facility providing capacity for future capital raises ü Repurchased $257 million (excluding shares repurchased in December 2020 that settled in January 2021) of common stock at meaningful discount to tangible net book value


NEO	Short-Term Incentive Award ($)	Percentage of 2021 Target
Peter J. Federico	$2,632,500	97.5%
Gary D. Kain	$4,387,500	97.5%
Christopher J. Kuehl	$1,764,000	98.0%
Bernice E. Bell	$985,000	98.5%
Aaron J. Pas	$775,688	98.5%
Kenneth L. Pollack	$837,250	98.5%


Mix of Long-Term Incentive Awards
NEO	Time-Vested RSUs ($) 1	Performance-Vested RSUs ($) 2	Total Value of Awards ($) 3
Peter J. Federico 4	1,122,000	2,278,000	3,400,000
Gary D. Kain 5	2,029,500	4,120,500	6,150,000
Christopher J. Kuehl 6	701,250	1,423,750	2,125,000
Bernice E. Bell	550,000	550,000	1,100,000
Aaron J. Pas	427,500	427,500	855,000
Kenneth L. Pollack	475,000	475,000	950,000


Performance Variable	Metric Weight	Below Threshold	Threshold	Base Performance Target	Outperformance
Absolute Three-Year Economic Return	50%	< 0.0%	0.0%	30.0%	≥ 60.0%
Relative Three-Year Economic Return	50%	< (4.5%)	(4.5%)	3.0%	≥ 10.5%
Payout Factor (% of Target Shares)	100%	0%	0%	100%	200%