Dynex Capital Supplements Proxy with Executive Pay Details

TL;DR

Dynex Capital is giving more deets on exec pay ahead of the May 17th shareholder meeting. #ExecComp

AI Summary

Dynex Capital, Inc. is providing supplemental information to its 2024 proxy statement regarding its executive compensation program. The Compensation Committee, working with Ferguson Partners Consulting L.P., aims to provide stockholders with helpful context for the upcoming Annual Meeting on May 17, 2024.

Why It Matters

This filing provides shareholders with additional context on executive compensation, which is a key factor in corporate governance and can influence investor decisions.

Risk Assessment

Risk Level: low — This is a supplemental filing providing additional context on executive compensation, not a material event like an acquisition or significant financial change.

Key Players & Entities

• Dynex Capital, Inc. (company) — Filer of the DEFA14A
• Ferguson Partners Consulting L.P. (company) — Compensation consultant for Dynex Capital
• May 17, 2024 (date) — Date of the 2024 Annual Meeting of Stockholders

FAQ

Key Financial Figures

• $2,558.9 — ra Investment Corporation Mortgage REIT $2,558.9 Hannon Armstrong Sustainable Infrastru
• $2,141.6 — cture Capital, Inc. Infrastructure REIT $2,141.6 New York Mortgage Trust, Inc. Mortgage
• $1,628.1 — York Mortgage Trust, Inc. Mortgage REIT $1,628.1 Redwood Trust, Inc. Mortgage REIT $1,2
• $1,202.7 — 28.1 Redwood Trust, Inc. Mortgage REIT $1,202.7 Granite Point Mortgage Trust, Inc. Mor
• $859.0 M — oint Mortgage Trust, Inc. Mortgage REIT $859.0 MFA Financial, Inc. Mortgage REIT $1,899.
• $1,899.9 — 59.0 MFA Financial, Inc. Mortgage REIT $1,899.9 PennyMac Mortgage Investment Trust Mor
• $1,957.1 — Mortgage Investment Trust Mortgage REIT $1,957.1 Two Harbors Investment Corp. Mortgage
• $2,203.4 — Harbors Investment Corp. Mortgage REIT $2,203.4 Dynex Capital Mortgage REIT $870.7
• $870.7 — $2,203.4 Dynex Capital Mortgage REIT $870.7 How we set executive pay using our pe
• $500,000 — salary was set at an annualized rate of $500,000 when he joined the Company in July 2022
• $1.5 million — ach granted RSUs with a market value of $1.5 million in September 2023 to bridge the gap bet
• $750,000 — tal Chimera Investment Corporation CIM $750,000 $3,712,500 $1,463,378 $5,925,878 Redwo
• $3,712,500 — era Investment Corporation CIM $750,000 $3,712,500 $1,463,378 $5,925,878 Redwood Trust RW
• $1,463,378 — ent Corporation CIM $750,000 $3,712,500 $1,463,378 $5,925,878 Redwood Trust RWT $900,000
• $5,925,878 — tion CIM $750,000 $3,712,500 $1,463,378 $5,925,878 Redwood Trust RWT $900,000 $450,000 $4

Filing Documents

• defa14aletterfromcompcommi.htm (DEFA14A) — 56KB
• image_0.jpg (GRAPHIC) — 13KB
• 0000826675-24-000055.txt ( ) — 75KB

From the Filing

Document May 1, 2024 Dear Stockholders, On behalf of the Compensation Committee of the Board of Directors of Dynex Capital, Inc. ("the Company" or "Dynex"), we are writing to provide you with additional information to supplement the material in the Company's proxy statement ("Proxy Statement") for use at our 2024 Annual Meeting of Stockholders (the "Annual Meeting") to be held on Friday, May 17, 2024 at 900 am Eastern Time. Specifically, we would like to provide additional context around the Company's executive compensation program that we believe will be helpful for stockholders. Summary Our Compensation Committee works with Ferguson Partners Consulting L.P. ("FPC") as a compensation consultant to select an appropriate peer group for the Company. Our peer group consists of internally managed public residential mortgage real estate investment trusts ("REITs") that have similar market capitalization (market capitalization correlates closely with capital in the REIT industry), that are similar to us based on business strategy, asset class focus, and the executives of the peers are required to have comparable skills and experience as the Company's executives. We have used this peer group consistently over the years, with appropriate updates, and we believe it properly correlates with the Company's business. In 2023, we renegotiated the employment contracts of Byron Boston, our CEO, and Smriti Popenoe, our President and CIO, in connection with Mr. Boston's assumption of the Chairman title, while continuing as CEO, and Ms. Popenoe's promotion to President and CIO. In that process, the Compensation Committee increased their salaries and made a one-time bridge equity grant of restricted stock units ("RSUs"). The RSU grants were a one-time grant designed to further align compensation with the median compensation of the Company's peer group, provide leadership stability for the Company and its shareholders, and provide appropriate incentives for the executive officers to focus on important strategic initiatives of the Company during the next several years as disclosed in the Proxy Statement. How we develop our peer group In determining the compensation of the Company's executive officers, the Compensation Committee engaged the services of FPC as a compensation consultant to assist the Committee in determining appropriate compensation levels for the executive officers using the executive compensation structures and the financial performance of a group of comparable companies. Our methodology for choosing peers, and the companies in the current peer group, have not materially changed in recent years. The Company's peer group focuses principally on internally managed public residential mortgage REITs that have similar market capitalization, that are similar to us based on business strategy, asset class focus, and size, and the executives of which are required to have similar skills and experience as our executives. As an internally managed public mortgage REIT, capital is an important metric in assessing the Company's value. In the REIT industry, market capitalization correlates closely to capital. We would like to note that, for our business, capital is a more important financial metric for determining our peers than revenue. Capital indicates how much risk the management team is 1 managing and the size of the Company's portfolio. Revenue can be influenced by operational or accounting factors that may not reflect the size and scope of the business or the complexity of the Company's operations. A peer group using solely revenue as a screening tool would result in a peer group that may not resemble the Company's direct competitors. To attract and retain executives with the necessary skill sets and expertise to operate a company like Dynex, we believe it is imperative the Compensation Committee recognizes the metrics that are relevant in the REIT industry and benchmarks against a relevant peer group developed utilizing those metrics. The peer group used by our Compensation Committee, as recommended by FPC, is generally comprised of 5 to 10 companies that have comparable market capitalization within a range and are direct competitors or who are industry-relevant. The Compensation Committee determined to exclude externally managed mortgage REITs from our peer group due to the limited publicly available comparative compensation data for their executives. Peer Group Developed by the Compensation Committee and FPC Name Sector Description Capital $ in Millions (as of 12312023) Chimera Investment Corporation Mortgage REIT $2,558.9 Hannon Armstrong Sustainable Infrastructure Capital, Inc. Infrastructure REIT $2,141.6 New York Mortgage Trust, Inc. Mortgage REIT $1,628.1 Redwood Trust, Inc. Mortgage REIT $1,202.7 Granite Point Mortgage Trust, Inc. Mortgage REIT $859.0 MFA Financial, Inc. Mortgage REIT $1,899.9 PennyMac Mortgage Investment Trust Mortgage REIT $1,957.1 Two Harbors Investment Corp. Mortg

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View this DEFA14A filing on SEC EDGAR