AGNC Investment Corp PRE 14A, filed Feb 23, 2023

AGNC Investment Corp. (AGNC)

PRE 14A 2023-02-23

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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 20, 2023, at 9:00 a.m., Eastern Time

WHERE:	The Annual Meeting will be held in a virtual format. The virtual meeting site is www.virtualshareholdermeeting.com/AGNC2023.

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 conduct an advisory vote on the frequency of future advisory votes on executive compensation;

	4)	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, 2023;

	5)	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


	6)	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 24, 2023.

MEETING DETAILS:	Attendance at the meeting is limited to holders of common stock as of the close of business on February 24, 2023. 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 2023 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, 2022, are first being sent to our common stockholders on or about March , 2023.


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

Proposal 2: Advisory Resolution to Approve Executive Compensation	FOR	16

Proposal 3: Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation	EVERY YEAR	17

Proposal 4: Ratification of Appointment of Independent Public Accountant	FOR	18

Proposal 5: Amendments to our Certificate of Incorporation eliminating supermajority voting requirements
A.Amendments to certain provisions of our Certificate of Incorporation	FOR	21
B. Amendments to our Bylaws	FOR	21
C. Removal of directors	FOR	22


Proxy Summary			i
Board and Governance Matters			1
Board Leadership Structure			1
Corporate Governance			2
Committees of the Board of Directors			3
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			8
Director Resignation Policy			9
Certain Transactions with Related Persons			9
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: Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation			17
General Information			17
Conclusion and Recommendation; Vote Required			17
Proposal 4 : Ratification of Appointment of Independent Public Accountant			18
Independent Public Accountant’s Fees			18
Pre-Approval Policy			18
Conclusion and Recommendation; Vote Required			19
Report of the Audit Committee			20
Proposal 5 : Approval of Amendments to Our Amended and Restated Certificate of Incorporation Eliminating Supermajority Voting Requirements			21
General Information			21
Proposal 5 A: Amendment to Eliminate the Supermajority Voting Standard for Certain Amendments to Our Certificate of Incorporation			21
Proposal 5 B: Amendment to Eliminate the Supermajority Voting Standard for Amendments to Our Bylaws			21
Proposal 5 C: Amendment to Eliminate the Supermajority Voting Standard for Removal of Directors			22
Conclusion and Recommendation; Vote Required			22


IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 20, 2023 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, 2022, are available free of charge on the internet at www.AGNC.com/2023proxymaterials.


Executive Officers of Registrant			23
Executive Officer Biographies			23
Executive Compensation			25
Compensation Discussion and Analysis			25
2022 Named Executive Officers			25
Executive Summary			25
Business Overview			25
Our Business in the Context of Our Broader Industry			25
2022 Year in Review			27
Compensation Philosophy and Objectives			28
Stockholder Engagement			29
Compensation Governance Practices			31
Compensation Program In Detail			32
Compensation Program Elements			32
Corporate Scorecard for Calculating Annual Bonus			33
Equity Incentive Compensation			37
Compensation Decision Process			39
Other Compensation Policies and Practices			42
Report of the Compensation and Corporate Governance Committee			44
2022 Summary Compensation Table			44
Grants of Plan-Based Awards in Fiscal Year 2022			46
Outstanding Equity Awards at 202 2 Fiscal Year-End			47
Option Exercises and Stock Vested for Fiscal Year 2022			48
Severance and Change of Control Payments			48
Pay Versus Performance			51
CEO Compensation Pay Ratio			55
Information Regarding Company Voting Securities			56
Security Ownership of Management and Certain Beneficial Owners			56
Delinquent Section 16(a) Report			57
Questions and Answers About Stockholder Communications and Proposals			58
Questions and Answers About the 202 3 Annual Meeting and Voting			59
Appendix I: Proposed Amended Provisions of Our Certificate of Incorporation			A1-1


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 the 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 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



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 5.8 years •Regular meetings of independent directors without members of management •Stock ownership guidelines for directors and executive officers •Robust stockholder engagement program, including annual outreach campaign to institutional investors •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 96% of our Board and committee meetings in 2022 •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 24, 2023)
	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
Andrew A. Johnson, Jr.	112,500	147,500	260,000
Prue B. Larocca	212,500	147,500	360,000
Paul E. Mullings	112,500	147,500	260,000
Frances R. Spark	112,500	147,500	260,000



						DONNA J. BLANK, 61
						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 and Risk Committee at American Enterprise Mutual Holding Company since March 2018 and has also served as chair of the Audit and Risk Committee since March 2020. Ms. Blank will also assume the role of Lead Independent Director at American Enterprise in March 2023. Ms. Blank holds an MBA in Finance and a Master of International Affairs, both from Columbia University. In 2022, she completed the MIT Sloan School of Management Executive Education program in Cybersecurity Leadership. 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, 51
						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, 56
						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. Mr. Federico previously served as President and Chief Operating Officer of MTGE Investment Corp. from March 2018 until May 2018 and as Executive Vice President and Chief Financial Officer of MTGE Investment Corp. from July 2016 until March 2018. 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.



						JOHN D. FISK, 66
						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.


AGNC INVESTMENT CORP. AT A GLANCE


AGNC INVESTMENT CORP. AT A GLANCE


AGNC INVESTMENT CORP. AT A GLANCE


AGNC INVESTMENT CORP. - Proxy Statement			iii



						ANDREW A. JOHNSON, JR., 60
						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, 58
						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. (from March 2016 until May 2018 and as Chief Investment Officer from March 2011 until May 2018. In addition, he served as President of MTGE from March 2011 until March 2018. Director Qualifications: Mr. Kain’s extensive and lengthy expertise in the Agency mortgage sector and his deep knowledge of our business as our former Chief Executive Officer and Chief Investment Officer strengthens our Board’s collective qualifications, skills, experience, and viewpoints.



						PRUE B. LAROCCA, 71
						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, 72
						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, 64
						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.


	2022	2021
Audit Fees	$1,875,500	$1,756,000
Audit-Related Fees	—	—
Tax Fees	201,316	82,680
All Other Fees	—	—
Total Fees	$2,076,816	$1,838,680


PROPOSAL 5: APPROVAL OF AMENDMENTS TO OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION ELIMINATING SUPERMAJORITY VOTING REQUIREMENTS


Name			Title
Peter J. Federico			President and Chief Executive Officer
Gary D. Kain			Executive Chair
Christopher J. Kuehl			Executive Vice President and Chief Investment Officer
Bernice E. Bell			Executive Vice President and Chief Financial Officer
Kenneth L. Pollack			Executive Vice President, General Counsel, Chief Compliance Officer, and Secretary



2022 Year in Review
In 2022, financial markets endured a difficult transition resulting from the Federal Reserve (the “Fed”) policy pivot from an extremely accommodative policy following the Pandemic and the associated economic impact to an aggressive tightening cycle to combat significant inflationary pressures. Interest rates across the yield curve rose materially as the Fed raised the Federal Funds rate by 4.25% in just nine months. The yield on ten-year U.S. Treasury securities rose by nearly 2.5%, generating a total return for these bonds of -15% in 2022, the worst annual performance in decades. In sharp market downturns, Agency MBS tend to initially underperform other fixed income asset classes, and 2022 was no exception. Agency MBS yield spreads to benchmark interest rates across all coupons reached historically wide levels, and the unlevered Bloomberg U.S. MBS Index total return for the year was -12%, its worst annual performance since the Index's inception in 1976. Against this challenging macroeconomic backdrop, AGNC posted an economic return of -28.4%, comprised of $1.44 of dividends per common share and a $5.91 decrease in tangible net book value per common share. The Company maintained its dividend of $0.12 per common share per month without change despite these economic headwinds. Although AGNC modestly underperformed our Agency REIT Peer Group1 on an economic return basis in 2022 (-28.4 % for AGNC vs. - % for our Agency REIT Peer Group), AGNC’s total stock return for the year materially exceeded the total stock return of the Agency REIT Peer Group (-22% for AGNC vs. -30% average for Agency REIT Peer Group members). AGNC's outperformance on a total stock return basis is even more notable over the three- and five-year horizons, in which it posted annualized total stock returns of -7% (versus -21% for the Agency REIT Peer Group average) and -2% (versus -14% for the Agency REIT Peer Group average), respectively. In addition, AGNC maintained the lowest operating expense ratio as a percentage of stockholders’ equity among residential mortgage REITs for the sixth consecutive year, comprising every full calendar year since AGNC’s internalization on July 1, 2016.2 In addition, bolstering our primary focus on generating favorable risk-adjusted returns for our stockholders, AGNC executed upon a number of strategic and operational initiatives in 2022 to enhance our franchise value, including numerous operational measures implemented to improve operating efficiency and risk management processes, capital activities including accretive common and preferred equity issuances and common stock repurchases, continued improvement of our ESG and sustainability disclosure and practices, and enhancements of our corporate communications and investor outreach initiatives. These activities are described in greater detail in our Strategic and Operational Review on page 35.



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			2022 Base Salary
Peter J. Federico			$900,000
Gary D. Kain			$500,000
Christopher J. Kuehl			$900,000
Bernice E. Bell			$500,000
Kenneth L. Pollack			$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
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	35.0%	< (5.0%)	(5.0%)	1.0%	≥ 5.5%
	Price-to-Tangible Book Ratio vs. Peer Index 2	15.0%	< (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%	49.2%	36.9%
Strategic / Operational Metrics	25%	100.0%	25.0%
Corporate Scorecard Payout			61.9%


Component of Value Proposition	Objective / Focus	Highlights
Operating Efficiency	ü Maintain low operating cost structure relative to the residential mortgage REIT and broader asset management industries	ü Continued to outperform mREIT industry on an operating cost basis by a wide margin ü Completed transition of custody clearing / settlement services to our wholly-owned broker dealer subsidiary Bethesda Securities, LLC, generating substantial cost savings and reducing exposure to third-party custodian operations ü Enhanced operational efficiencies through development of new tools and processes in Agency MBS valuation and treasury and middle office operations
Disciplined Risk Management	ü Utilize comprehensive risk management framework predicated on careful asset selection, disciplined hedging and diversified funding to preserve tangible net book value across a wide range of market scenarios ü Maintain business continuity through operations and cybersecurity risk management	ü Operated in compliance with investment risk reporting framework throughout 2022, mitigating exposure to market volatility and diminished liquidity in a rising interest rate environment ü Maintained funding diversification with ample availability and capacity ü Continued to optimize funding, custody, and TBA clearing through Bethesda Securities and further integrated Bethesda Securities and AGNC back and middle office operations ü Maintained compliance with all reporting, listing, and REIT regulatory requirements ü Continued improvement and testing of IT infrastructure to strengthen information security posture and resiliency ü Maintained and enhanced corporate culture focused on compliance and risk management, including training on code of ethics and insider trading requirements, as evidenced by employee survey results ü Implemented new and more efficient processes, including valuation process for Agency MBS ü Mobilized to greater in office work expectations in March without disruption
Stockholder Focus and Capital Management	ü Provide detailed and transparent public financial disclosure, actively engage with investors, and provide clear and effective stockholder communications ü Maintain an active, stockholder-friendly capital management approach that is consistent with broader market considerations	ü Enhanced corporate communications and investor outreach initiatives ü Participated in 11 sell-side hosted events, including retail network calls hosted by research analysts, held over 125 meetings and calls with institutional investors, and responded to over 360 letters, emails, and calls from retail investors throughout the year ü Enhanced liquidity and earnings capacity through ATM offerings of over $525 million of common stock and $150 million offering of new Series G Fixed-Rate Reset Cumulative Redeemable Preferred Stock ü Repurchased over $50 million of common stock at a meaningful discount to tangible net book value
ESG Framework and Practices	ü Expand and improve high-quality ESG and corporate sustainability practices, and incorporate material ESG and sustainability factors into AGNC’s strategy, business, and operations	ü Maintained high quality governance oversight and structure, including compliance with governance requirements ü Filed second annual ESG report and disclosure consistent with SASB and TCFD reporting framework ü Created employee-led committee focused on community engagement and corporate giving ü Employee survey results reflect high levels of satisfaction, including in areas of DEI, engagement, training, and development ü Leased new headquarters office space in LEED Platinum certified building; designed build out with focus on sustainability and wellness


NEO	Short-Term Incentive Award ($)	Percentage of 2022 Target
Peter J. Federico	$2,228,400	61.9%
Gary D. Kain	$2,228,400	61.9%
Christopher J. Kuehl	$1,512,000	75.6%
Bernice E. Bell	$1,001,250	80.1%
Kenneth L. Pollack	$801,000	80.1%


Mix of Long-Term Incentive Awards
NEO	Time-Vested RSUs ($) 1	Performance-Vested RSUs ($) 2	Total Value of Awards ($) 3
Peter J. Federico	1,485,000	3,015,000	4,500,000
Gary D. Kain	1,386,000	2,814,000	4,200,000
Christopher J. Kuehl	858,000	1,742,000	2,600,000
Bernice E. Bell	412,500	837,500	1,250,000
Kenneth L. Pollack	330,000	670,000	1,000,000


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%


Mortgage REITs:			Asset Management and Financial Services Companies:
Annaly Capital Management, Inc.			Affiliated Managers Group, Inc.
Arbor Realty Trust, Inc.			AllianceBernstein Holding L.P.
Chimera Investment Corporation			Ameriprise Financial, Inc.
Ladder Capital Corp.			Apollo Global Management LLC
MFA Financial, Inc.			Ares Management LP
Redwood Trust, Inc.			DigitalBridge Group, Inc.
Two Harbors Investment Corp.			Invesco Ltd.
			KKR & Co. L.P.
			The Blackstone Group L.P.
			The Carlyle Group L.P.