ANNALY CAPITAL MANAGEMENT INC (Form: DEF 14A, Received: 04/04/2024 16:19:07)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

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Soliciting Material under §240.14a-12

Annaly Capital Management, Inc.

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MESSAGE FROM OUR CHIEF EXECUTIVE OFFICER & CHIEF INVESTMENT OFFICER

Dear Fellow Stockholders,

Over the last year, Annaly has taken critical steps to position ourselves and our Board of Directors (the “Board”) for the next phase of Annaly’s growth. Despite extended market volatility, we have been steadfast in our mission to establish Annaly as the premier diversified capital manager with investment strategies across mortgage finance. In 2023, just as we have since Annaly’s inception as a public company more than twenty-five years ago, we proactively managed our core Agency strategy, while also building and scaling our Residential Credit and Mortgage Servicing Rights businesses.

[MISSING IMAGE: ph_davidfinkelstein-4c.jpg]

ENHANCEMENTS WE MADE TO OUR CORPORATE GOVERNANCE FRAMEWORK TO BOLSTER THE LONG-TERM SUCCESS OF THE COMPANY

In reflecting on the strategic evolution and direction of our businesses, our Board simultaneously applied a similar lens to its own current and future composition. In consideration of the retirement of our co-founder Wellington J. Denahan from the Board last May, and as part of our longer-term Board succession planning process, the Board appointed three exceptional new Directors to its ranks in 2023. The additions of Manon Laroche, Martin Laguerre and Scott Wede ensure that our Board’s overall balance of skills and experiences will be uniquely situated to support Annaly’s continued success for years to come.

As the first new Directors to be added to our Board since the height of the COVID-19 pandemic, management and the Board worked collaboratively to develop an enhanced in-person Director onboarding, which included personal briefings with tailored educational materials presented by executive officers and other senior business and functional leaders covering Annaly’s positioning and strategic plans, financial statements and reporting requirements, operating and regulatory environments, and key policies and practices. In late 2023, we were excited to bring several Directors — both new and established — to visit Annaly’s first branch location, where our Directors spent meaningful time with the talented professionals leading our efforts in the Dallas-Fort Worth metropolitan area.

As Annaly has grown beyond our New York City roots, we are more keenly aware than ever that our people are our greatest asset. The long-term success and growth of our businesses would not have been possible without our employees’ expertise, dedication and excellence, and thus in turn, we are equally committed to promoting their well-being, engagement and development. We were particularly pleased by the results of last year’s annual employee engagement survey, which generated a 90% response rate and demonstrated overall engagement well above the U.S. Diversified Financials average.

OUR CONTINUED COMMITMENT TO CORPORATE RESPONSIBILITY TO FURTHER ALIGN WITH OUR STOCKHOLDERS’ INTERESTS

Recently, we were proud to publish our statement on human rights, which guides how we treat and train our employees, how we work with our vendors and how we interact with the communities where we live, work and invest, all of which reflect our fundamental belief that all people should be treated fairly and with respect. As a further testament to our commitment to corporate responsibility, we recently published our political engagement and contributions policy, which guides our engagement on public policy. While Annaly has long prohibited the use of corporate funds for any political contributions or expenditures, we codified our existing practices to ensure that our political engagement and related activities comply with all applicable laws, are consistent with our core values and protect and enhance stockholder value.

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MESSAGE FROM OUR CHIEF EXECUTIVE OFFICER & CHIEF INVESTMENT OFFICER

Since our management internalization transaction in 2020, the Management Development and Compensation Committee of our Board has institutionalized a best-practice driven compensation program, which reflects year-over-year enhancements driven by stockholder feedback. In response to, and in order to drive alignment with, our stockholders, for 2023 the Management Development and Compensation Committee adopted a number of refinements to our executives’ annual incentive framework, which included an increase to the weighting of the Company’s key financial metric of Relative Tangible Economic Return and the replacement of a limited Total Stockholder Return governor with a more expansive Absolute Tangible Economic Return modifier.

In closing, our stockholders are at the forefront of every decision we make and, as always, we are grateful for your feedback, for your investment and for your continued support. With that in mind, we hope that you will join us for this year’s Annual Meeting of Stockholders, which will be conducted via interactive online format on May 15th.

Sincerely,

David L. Finkelstein
Chief Executive Officer & Chief Investment Officer

April 4, 2024

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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”):

	MEETING INFORMATION
				Date and Time
	May 15, 2024 9:00 a.m. (Eastern Time)

				Virtual Meeting
	www.virtualshareholdermeeting.com/ NLY2024

				Who May Vote
	Only common stockholders of record at the close of business on March 18, 2024, the record date for the Annual Meeting (the “Record Date”), may vote at the Annual Meeting and any postponements or adjournments thereof.

ITEMS OF BUSINESS

Proposal

Board Vote
Recommendation

Page
Reference

Election of twelve Directors for a term ending at the 2025 annual meeting of stockholders and when their respective successors are duly elected and qualify

FOR each Director nominee

Approval, on an advisory basis, of the Company’s executive compensation

FOR

Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2024

FOR

The Company’s 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 4, 2024.

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 1-888-700-7644 in the United States or 1-929-207-8058 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 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 telephonic 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.

By Order of the Board of Directors,

Anthony C. Green
Chief Corporate Officer, Chief Legal Officer & Secretary

April 4, 2024

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON MAY 15, 2024

The Company’s Proxy Statement and 2023 Annual Report to Stockholders are available at www.proxyvote.com.

Your vote is very important. Please exercise your right to vote.

Vote Before the Meeting

Vote During the Meeting

Internet

Mobile Device

Phone

Mail

Attend the Meeting

Online at
www.proxyvote.com

Scan the QR code to visit
www.proxyvote.com

Call toll-free 24/7 1-800-690-6903

Complete & return your proxy card

Online at www.virtualshareholder
meeting.com/NLY2024

Voluntary Electronic Receipt of Future Proxy Materials

We promote sustainable and environmentally friendly practices in order to reduce energy use, decrease waste, increase recycling and lower water consumption in our daily operations. We are committed to continuing to look for ways to minimize the environmental footprint of our operations.

We encourage our stockholders to enroll in e-delivery to help us conserve our natural resources and save on annual meeting costs

Online at
www.proxyvote.com

Scan the QR code
to visit
www.proxyvote.com

Combined with your adoption of electronic delivery of proxy materials, and the elimination of approximately
408,600 sets of proxy materials, we can ideally reduce the impact on the environment by:

using approximately 1,070 fewer tons of wood, or 6,420 fewer trees (100 acres of forest)

saving approximately 5.74 million gallons of water, or the equivalent of filling approximately 261 swimming pools

using approximately 6.84 billion fewer BTUs, or the equivalent of the amount of energy used by 8,140 residential refrigerators for one full year

eliminating approximately 316,000 pounds of solid waste

using approximately 4.82 million fewer pounds of greenhouse gases, including CO2, or the equivalent of 438 automobiles running for one year

reducing hazardous air pollutants by approximately 428 pounds

Environmental impact estimates were calculated using the Environmental Paper Network Paper Calculator. For more information visit www.papercalculator.org.

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	PROXY SUMMARY					1
	CORPORATE GOVERNANCE AT ANNALY					11
	PROPOSAL 1 ELECTION OF DIRECTORS					12
	Director Nominees					14
	Recent Corporate Governance & Corporate Responsibility Highlights					20
	Governing Documents					21
	BOARD COMMITTEES					22
	Committee Membership Determinations					22
	Audit Committee					23
	Corporate Responsibility Committee					23
	Management Development and Compensation Committee					24
	Nominating/Corporate Governance Committee					24
	Risk Committee					25
	BOARD STRUCTURE AND PROCESSES					26
	Board Structure and Processes					26
	Board Leadership Structure					26
	Independence of Directors					27
	Executive Sessions of Independent Directors					27
	Board Oversight of Risk					27
	CEO Performance Reviews and Management Succession Planning					28
	Board Effectiveness, Self-Evaluations and Refreshment					28
	Director Criteria and Qualifications					29
	Consideration of Board Diversity					30
	Director Nomination Process					30
	Stockholder Recommendation of Director Candidates					30
	Communications with the Board					30
	Director Attendance					31
	Board Commitment and Over-Boarding Policy					31
	Director Orientation and Continuing Education					31
	Certain Relationships and Related Party Transactions					31
	Compensation of Directors					32
	EXECUTIVE OFFICERS					34
	COMPENSATION DISCUSSION AND ANALYSIS					35
	Executive Summary					36
	How Executive Compensation Decisions Are Made					40
	Executive Compensation Design and Award Decisions for 2023					42
	Executive Compensation Policies					52
	Report of the Compensation Committee					53

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

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PROXY SUMMARY

This summary contains highlights about the Company and the Annual Meeting. This summary does not contain all the information that you should consider in advance of the Annual Meeting, and the Company encourages you to read the entire Proxy Statement and the Company’s 2023 Annual Report on Form 10-K carefully before voting.

The 2024 Annual Meeting of Stockholders

Date and Time

Wednesday, May 15, 2024 at 9:00 a.m. (Eastern Time)

Virtual Meeting

www.virtualshareholdermeeting.com/NLY2024

Record Date

Close of business on March 18, 2024

VOTING MATTERS

Proposal		Board Vote Recommendation		Page Reference
1	Election of Directors		FOR each Director nominee	12
2	Approval, on an advisory basis, of the Company’s executive compensation		FOR	65
3	Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2024		FOR	66

Your vote is very important. Please exercise your right to vote.

Vote Before the Meeting

Vote During the Meeting

Internet

Mobile Device

Phone

Mail

Attend the Meeting

Online at
www.proxyvote.com

Scan the QR code to visit
www.proxyvote.com

Call toll-free 24/7 1-800-690-6903

Complete & return your proxy card

Online at www.virtualshareholder
meeting.com/NLY2024

PARTICIPATE IN THE ANNUAL MEETING

The virtual Annual Meeting will be available to stockholders across the globe via any Internet-connected device and has been designed to provide the same rights to participate as you would have at an in-person meeting, including providing opportunities to vote, make statements and ask questions. This approach aligns with the Company’s broader sustainability goals and reduces costs for both the Company and our stockholders.

An audio broadcast of the Annual Meeting will also be available to stockholders by telephone toll-free at 1-888-700-7644 in the United States or 1-929-207-8058 if calling from outside the United States, and requesting the Annaly Capital Management Annual Meeting. Please note that listening to the telephonic audio broadcast will not be deemed to be attending the Annual Meeting and you cannot ask questions or vote from such audio broadcast. If you plan to attend the Annual Meeting online or listen to the 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. Stockholders can access Annaly’s interactive pre-meeting forum, where you can submit questions and vote in advance of the Annual Meeting and view copies of our proxy materials, by visiting www.proxyvote.com. We will respond to as many inquiries that are pertinent to the Company at the Annual Meeting as time allows.

ANNALY CAPITAL MANAGEMENT 2024 PROXY STATEMENT | 1

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PROXY SUMMARY

Annaly at a Glance

NLY

1997

$11bn

$74bn

New York Stock Exchange (“NYSE”) Traded

Initial Public Offering

Permanent Capital(1) as of December 31, 2023

Total Assets(2) as of December 31, 2023

CONTINUING EVOLUTION OF ANNALY

Following the dispositions of our Commercial Real Estate and Middle Market Lending businesses in 2021 and 2022, respectively, Annaly has successfully refocused on our core housing finance strategy, which has been our mission since our founding. Since the beginning of 2023, we have continued to enhance our positioning as the leading residential housing focused mortgage REIT through the expansion of our Residential Credit and Mortgage Servicing Rights (“MSR”) businesses. We believe the combination of these strategies on balance sheet provides our stockholders with superior risk-adjusted returns, a strong earnings profile and stability across different interest rate and macro environments. Simultaneously, we have also continued to enhance our best-in-class corporate governance and responsibility practices.

Note: Financial data as of December 31, 2023.

(1)

Permanent capital represents Annaly’s total stockholders’ equity.

(2)

Total portfolio represents Annaly’s investments that are on-balance sheet as well as investments that are off-balance sheet in which Annaly has economic exposure. Assets reflect TBA purchase contracts (market value) of ($0.6)bn, exclude assets transferred or pledged to securitization vehicles of $13.3bn and include unsettled MSR commitments of $0.5bn and $1.4bn of retained securities that are eliminated in consolidation and are shown net of participations issued totaling $1.1bn. MSR commitments represent the market value of deals where Annaly has executed a letter of intent.

(3)

MSR assets include unsettled commitments of $518mm. MSR commitments represent the market value of deals where Annaly has executed a letter of intent. MSR purchase information aggregated from 2023 Fannie Mae and Freddie Mac monthly loan level files by eMBS servicing transfer data as of December 31, 2023.

(4)

Issuer ranking data from Inside Nonconforming Markets for 2022 through 2023 year-end (January 5, 2024 issue).

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PROXY SUMMARY

Executive Compensation

The Management Development and Compensation (“MDC”) Committee of our Board carefully considers the feedback we receive from our stockholders through our engagement efforts, as well as the voting results on our advisory resolutions on executive compensation, when making executive compensation decisions. In response to this feedback, for 2023 the MDC Committee adopted refinements to its annual incentive framework for executive officers, which consists of a corporate scorecard of objective financial and risk metrics along with a qualitative assessment of individual performance. These enhancements included:

▪

Increasing the weighting of the Relative Tangible Economic Return metric such that it now accounts for more than 60% of the total scorecard value linked to financial metrics, with Operating Efficiency accounting for the remainder

–

Both such metrics had been equally-weighted in 2022

▪

Replacing the Total Stockholder Return (“TSR”) governor, which had previously only capped the portion of the annual incentive award tied to Relative Tangible Economic Return, with an Absolute Tangible Economic Return modifier, which impacts overall annual incentive award opportunity, including the portion of the award tied to individual performance

[MISSING IMAGE: pc_2024annualincentive-pn.jpg]

The MDC Committee believes that these compensation enhancements address the feedback we received from stockholders on our executive compensation program and serve to increase alignment between the interests of our stockholders and those of our executive officers.

ANNALY CAPITAL MANAGEMENT 2024 PROXY STATEMENT | 3

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PROXY SUMMARY

Recent Operating Achievements

Note: Market data and financial data as of December 31, 2023.

(1)

Data shown since Annaly’s initial public offering in October 1997 through December 31, 2023, and includes common and preferred dividends declared.

(2)

Issuer ranking data from Inside Nonconforming Markets for 2022 through 2023 year-end (January 5, 2024 issue).

(3)

Comprised of $5.2bn of unencumbered assets, which represents Annaly’s excess liquidity and defined as assets that have not been pledged or securitized (generally including cash and cash equivalents, Agency MBS, CRT, Non-Agency MBS, residential mortgage loans, MSR, reverse repurchase agreements, other unencumbered financial assets and capital stock), and $1.0bn of fair value of collateral pledged for future advances.

(4)

Represents a non-GAAP financial measure. See Appendix for a reconciliation of non-GAAP financial measures to most directly comparable GAAP measures.

(5)

Information aggregated from 2023 Fannie Mae and Freddie Mac monthly loan level files by eMBS servicing transfer data as of December 31, 2023.

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PROXY SUMMARY

Annaly’s Shared Capital Model and Strategic Focus

We continued to allocate capital across the residential mortgage loan in 2023, with the objective to evaluate the loan and invest across the most attractively priced portion of the mortgage. With Agency MBS as the anchor, we have been able to strategically grow our Residential Credit and MSR businesses into fully scaled platforms while maintaining an intentional focus on credit and risk management given broader market volatility and disruptions to the mortgage finance sector. We believe that we have achieved greater balance in the overall portfolio, which should benefit our leverage and liquidity profiles and support better risk-adjusted returns.

Note: Market data and financial data as of December 31, 2023.

(1)

Represents Annaly’s investments that are on-balance sheet as well as investments that are off-balance sheet in which Annaly has economic exposure. Total assets include commercial real estate related assets, which are excluded from capital allocation calculations. Agency assets reflect TBA purchase contracts (market value) of ($0.6)bn. Residential Credit assets exclude assets transferred or pledged to securitization vehicles of $13.3bn, include $1.4bn of retained securities that are eliminated in consolidation and are shown net of participations issued totaling $1.1bn. MSR assets include unsettled MSR commitments of $0.5bn. MSR commitments represent the market value of deals where Annaly has executed a letter of intent.

(2)

Capital allocation for each of the investment strategies is calculated as the difference between each investment strategy’s allocated assets, which include TBA purchase contracts, and liabilities. Dedicated capital allocations as of December 31, 2023 exclude commercial real estate assets.

(3)

Sector rank compares Annaly dedicated capital for both our Agency and Residential Credit businesses as of December 31, 2023 (adjusted for P/B as of December 31, 2023) to the market capitalization of the companies comprising the Agency and residential creditor sectors within the BBREMTG Index as of December 31, 2023.

ANNALY CAPITAL MANAGEMENT 2024 PROXY STATEMENT | 5

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PROXY SUMMARY

Delivering Significant Value for Stockholders

	6.0%				25+				748%
	economic return for the full year 2023				years of delivering yield to stockholders				total stockholder return since Annaly’s IPO(1)

(1)

TSR for the period beginning October 7, 1997 through December 31, 2023.

(2)

Data shown since Annaly’s initial public offering in October 1997 through December 31, 2023 and includes common and preferred dividends declared.

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

How We
Engaged

We are committed to ongoing engagement with both retail and institutional stockholders through a wide range of mediums, including:

▪

in-person and virtual meetings,

▪

conferences,

▪

phone calls,

▪

electronic communication, and

▪

social media.

Topics We
Discussed

Following the results of our 2023 advisory resolution on executive compensation (commonly known as a “Say-on-Pay” vote), which received support from over 88% of votes cast, we have continued our multi-pronged stockholder outreach campaign to solicit feedback on a number of issues, including:

▪

our executive compensation practices and disclosures,

▪

our human capital management, including diversity, equity and inclusion (“DE&I”) efforts,

▪

our corporate governance framework and policies, and

▪

our corporate responsibility and environmental, social and governance (“ESG”) initiatives.

	100%				~90%				>200
	of top 100 institutional investors included in 2023-2024 outreach efforts				met with investors representing ~90% of shares held by 10 largest stockholders in the 2023-2024 proxy season				meetings with stockholders across the U.S., Canada and Europe during 2023

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PROXY SUMMARY

RECENT STOCKHOLDER ENGAGEMENT EFFORTS

Annaly’s stockholder engagement efforts generated significant feedback for both the Board and management and have resulted in a number of enhancements to our corporate governance, corporate responsibility and executive compensation practices and disclosures over the last few years.

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

Additional
Actions
We Took

Our stockholder outreach is complemented by related initiatives, including:

▪

Analysis of market governance, compensation and ESG practices at peer companies

▪

Advice from external advisors on matters such as:

–

governance, compensation and ESG consultants,

–

board search firms,

–

proxy solicitors, and

–

discussions with proxy advisory services and corporate governance research firms

ANNALY CAPITAL MANAGEMENT 2024 PROXY STATEMENT | 7

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PROXY SUMMARY

Board Composition, Structure and Refreshment

The Nominating/Corporate Governance (“NCG”) Committee endeavors to have a Board representing diverse backgrounds and a wide range of professional experiences. The NCG Committee annually evaluates our Board’s overall composition and rigorously evaluates individual Directors to ensure a continued match of their skill sets and projected tenure against the needs of the Company. For additional information about individual Directors’ qualifications and experience, please see the Director biographies beginning on page 14.

SKILL/EXPERIENCE SUMMARY OF DIRECTORS

Skill/Experience

BOVICH

FINKELSTEIN

HAMILTON

HANNAN

HAYLON

LAGUERRE

LAROCHE

REEVES

SCHAEFER

VOTEK

WEDE

WILLIAMS

TOTAL

Complex and regulated industries

12/12

Compliance

4/12

Corporate governance

12/12

Ethics and ESG

7/12

Finance and accounting

11/12

Financial services

10/12

Government, public policy and regulatory affairs

3/12

Industry knowledge

9/12

Information technology/cybersecurity

3/12

Legal expertise

1/12

Mergers & acquisitions

11/12

Operations/human capital management

11/12

Other public company board experience

4/12

Private company board experience

8/12

Public company CEO

2/12

Risk management

12/12

Strategy development and implementation

11/12

Gender diversity

4/12

Racial/ethnic diversity

5/12

Audit Committee financial expert(1)

4/12

TOTAL

(1)

While Mr. Votek has the attributes of an “audit committee financial expert” under the Securities and Exchange Commission (“SEC”) rules based on his experience serving in a number of senior financial executive roles, including as the Company’s former CFO, Mr. Votek does not yet qualify as an Independent Director under the director independence guidelines published by certain institutions at this time, and therefore the Board has determined not to appoint Mr. Votek to the Audit Committee until he meets such guidelines.

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PROXY SUMMARY

DIVERSITY AND OTHER ATTRIBUTES OF DIRECTORS

As evidenced by the composition of our Board, we are committed to seeking out highly qualified candidates of diverse gender and race/ethnicity, as well as taking into account other factors that promote principles of diversity.

Our Corporate Governance Guidelines formalize the Board’s commitment to seeking out highly qualified candidates of diverse gender and race/ethnicity and include a Director refreshment policy prohibiting Independent Directors from standing for re-election after 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.

[MISSING IMAGE: pc_diversityother-pn.jpg]

[MISSING IMAGE: lg_womenonboards-pn.jpg]

Environmental, Social and Governance

We are convinced that our ESG initiatives strengthen how we manage the Company and, as a responsible steward of capital, we actively focus on integrating ESG considerations into our overall strategy. We view ESG risks and opportunities as critical components for:

▪

achieving strategic business objectives,

▪

managing risks, and

▪

delivering attractive risk-adjusted returns over the long-term.

We strive to have a positive impact in the communities where we live, work and invest by conducting our business in accordance with the highest ethical standards, guided by our strong corporate values.

In June 2023, we published our fourth annual ESG Report, titled 25 Years of Purposeful Housing Finance Leadership. The report outlines our progress towards meeting our ESG objectives, which span four key areas:

ANNALY CAPITAL MANAGEMENT 2024 PROXY STATEMENT | 9

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PROXY SUMMARY

Additionally, the report includes climate-related disclosures following TCFD guidance as well as supplemental disclosures under the Sustainability Accounting Standards Board (SASB) framework and references the Global Report Initiative (GRI).

Our Corporate Governance Guidelines and Board Committee charters reflect integrated oversight of ESG practices, initiatives and related risk across the Board and its Committees. As outlined below, the full Board has overall responsibility for ESG oversight, and each of the Committees has oversight responsibility of specific ESG-related matters relating to the purpose, duties and responsibilities of each Committee.

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	Best Practices
	Director Independence and Oversight			▪ Separate CEO and Independent Chair of the Board ▪ 92% of 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 Diversity			▪ Board refreshment policy triggered upon earlier of 15 years of service or 73rd birthday ▪ Board is committed to seeking out highly qualified candidates of diverse gender and race/ ethnicity, as well as taking into account other factors that promote principles of diversity – 33% of Directors are women – 42% of Directors are racially/ethnically diverse – 80% of Committee leadership positions are held by women or racially/ethnically diverse Directors
	Director Qualifications and Evaluation			▪ Annual Board, Committee and individual Director self-evaluations, with periodic use of an external facilitator ▪ Comprehensive Board succession planning process ▪ Robust over-boarding policy which limits the number of outside public company boards, other than Annaly, on which Directors can serve to three for non-CEOs and one for sitting CEOs ▪ 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 ▪ Majority voting 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 ▪ Stockholders can submit questions for the Annual Meeting through an interactive pre-meeting forum and during the Annual Meeting
	Corporate Responsibility and ESG			▪ Board created Corporate Responsibility Committee in 2017 ▪ Publish annual ESG Reports, which include progress against ESG priorities and supplemental disclosures following TCFD, SASB and GRI guidance ▪ Corporate Governance Guidelines and Board Committee charters reflect integrated ESG oversight across the Board and its Committees ▪ Sponsor seven employee-led networks ▪ Disclose workforce diversity statistics, including EEO-1 Reports ▪ ▪ ▪ Political Engagement and Contributions Policy codifying our longstanding practice prohibiting the use of corporate funds for any political contributions or expenditures ▪ Included in the FTSE4Good Index for the fifth consecutive year

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ELECTION OF
DIRECTORS

At the Annual Meeting, stockholders will vote to elect twelve nominees to serve as Directors, whose terms will expire at the annual meeting of stockholders in 2025 (the “2025 Annual Meeting”) and when their respective successors are duly elected and qualify. The table below provides summary information about each of the Directors.

The Board has nominated and unanimously recommends a vote FOR each of:
▪ Francine J. Bovich ▪ David L. Finkelstein ▪ Thomas Hamilton ▪ Kathy Hopinkah Hannan	▪ Michael Haylon ▪ Martin Laguerre ▪ Manon Laroche ▪ Eric A. Reeves	▪ John H. Schaefer ▪ Glenn A. Votek ▪ Scott Wede ▪ Vicki Williams
as Directors, with each to hold office until the 2025 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.

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Name and Principal Occupation		Age	Director since	Independent	Annaly Committee Membership					Other Current Public Company Boards
Name and Principal Occupation		Age	Director since	Independent	Audit	Corporate Responsibility	Management Development and Compensation	Nominating/ Corporate Governance	Risk	Other Current Public Company Boards
	Francine J. Bovich Former Managing Director, Morgan Stanley Investment Management	72	2014							0
	David L. Finkelstein Chief Executive Officer and Chief Investment Officer, Annaly Capital Management, Inc.	51	2020							0
	Thomas Hamilton Former Strategic Advisor to the Global Head of Fixed Income, Currencies and Commodities, Barclays Capital	56	2019							1
	Kathy Hopinkah Hannan Former National Managing Partner, Global Lead Partner, KPMG LLP	62	2019							2
	Michael Haylon Former Managing Director and Head of Conning North America, Conning, Inc.	66	2008							0
	Martin Laguerre Senior Advisor, Warburg Pincus	50	2023							0
	Manon Laroche Former Managing Director, Head of Global Spread Products Securitized Sales, North America, Citigroup	54	2023							0
	Eric A. Reeves Founder and Chief Executive Officer Prospect Park LLC	51	2021							0
	John H. Schaefer Former President and Chief Operating Officer, Morgan Stanley Global Wealth Management	72	2013							0
	Glenn A. Votek(1) Former Chief Financial Officer, Annaly Capital Management, Inc.	65	2019							0
	Scott Wede Former Global Head of Securitized Products and Municipal Finance, Barclays Capital	51	2023							0
	Vicki Williams Chief Human Resources Officer, NBCUniversal	51	2018							0
Number of 2023 Meetings			Board – 12		6	4	8	5	5

Independent Chair of the Board

Committee Chair

Committee Member

Audit Committee Financial Expert

(1)

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Director Nominees

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

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

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

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

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

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

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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.

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

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

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.

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

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.

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Recent Corporate Governance & Corporate Responsibility Highlights

We are committed to continually enhancing our corporate governance and corporate responsibility practices.

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Governing Documents

CODE OF BUSINESS CONDUCT AND ETHICS

The Board has adopted a Code of Business Conduct and Ethics (the “Code of Conduct”), which sets forth the basic principles and guidelines for resolving various legal and ethical questions that may arise in the workplace and in the conduct of business. This Code of Conduct is applicable to the Company’s Directors, executive officers and employees, and is also a “code of ethics” as defined in Item 406(b) of Regulation S-K. We will make any legally required disclosures regarding amendments to, or waivers of, provisions of the Code of Conduct on our website.

CORPORATE GOVERNANCE GUIDELINES

The Board has adopted Corporate Governance Guidelines that, in conjunction with our charter, our bylaws and the charters of the Board Committees, provide the framework for governance of the Company.

OTHER GOVERNANCE POLICIES

Our Directors, executive officers and employees are also subject to our other governance policies, including a Foreign Corrupt Practices Act and Anti-Bribery Compliance Policy, an Insider Trading Policy and a Regulation FD Policy.

WHERE YOU CAN FIND THE CODE OF CONDUCT, CORPORATE GOVERNANCE GUIDELINES AND COMMITTEE CHARTERS

The Code of Conduct, Corporate Governance Guidelines, Audit Committee Charter, CR Committee Charter, MDC Committee Charter, NCG Committee Charter and Risk Committee Charter are available on our website (www.annaly.com). We will provide copies of these documents free of charge to any stockholder who sends a written request to:

Investor Relations
Annaly Capital Management, Inc.
1211 Avenue of the Americas
New York, NY 10036

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BOARD COMMITTEES

The Board has five standing Committees: the Audit Committee, the Corporate Responsibility Committee, the Management Development and Compensation Committee, the Nominating/Corporate Governance Committee and the Risk Committee.

The table below shows the membership as of the date of this Proxy Statement of each Board Committee and the number of Committee meetings held in 2023.

Director

Independent

Annaly Committee Membership

Audit

Corporate
Responsibility

Management Development
and Compensation

Nominating/Corporate
Governance

Risk

Francine J. Bovich

David L. Finkelstein

Thomas Hamilton

Kathy Hopinkah Hannan

Michael Haylon

Martin Laguerre

Manon Laroche

Eric A. Reeves

John H. Schaefer

Glenn A. Votek(1)

Scott Wede

Vicki Williams

% of Independent Members

100%

2023 Meetings (Board – 12)

Independent Chair of the Board

Committee Chair

Committee Member

Audit Committee Financial Expert

(1)

The Board affirmatively determined that Mr. Votek became an Independent Director effective August 2023 under all applicable criteria for independence in accordance with the NYSE listing standards and the Company’s Corporate Governance Guidelines. While Mr. Votek also has the attributes of an “audit committee financial expert” under SEC rules based on his experience serving in a number of senior financial executive roles, including as the Company’s former CFO, we recognize that Mr. Votek does not yet qualify as an Independent Director under the director independence guidelines published by certain institutions at this time, and therefore the Board has determined not to appoint Mr. Votek to the Audit Committee, MDC Committee or NCG Committee until he meets such guidelines.

Committee Membership Determinations

The Board annually reviews the membership and chair of each Board Committee as part of its broader Board and Committee refreshment and succession planning. This review, which is led by the NCG Committee, takes into account, among other factors, the needs of the Committees, the experience, availability and projected tenure of Directors and the desire to balance Committee continuity with fresh insights. For additional detail, see the “Board Effectiveness, Self-Evaluations and Refreshment” section of this Proxy Statement.

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BOARD COMMITTEES

AUDIT COMMITTEE		Number of Meetings in 2023: 6
COMMITTEE MEMBERS Kathy Hopinkah Hannan, Chair Thomas Hamilton Martin Laguerre John H. Schaefer Scott Wede	KEY RESPONSIBILITIES ▪ Appoints the independent registered public accounting firm and reviews its qualifications, performance and independence ▪ ▪ Reviews the plan and results of the auditing engagement with the Chief Financial Officer and the independent registered public accounting firm ▪ Oversees internal audit activities ▪ Oversees the quality and integrity of financial statements and financial reporting process ▪ Oversees the adequacy and effectiveness of internal control over financial reporting ▪ Reviews and pre-approves the audit and permitted non-audit services and proposed fees of the independent registered public accounting firm ▪ Prepares the report of the Audit Committee required by SEC rules to be included in the proxy statement ▪ Together with the Risk Committee, jointly oversees practices and policies related to cybersecurity and receives regular reports from management throughout the year on cybersecurity and related risks
	QUALIFICATIONS Each member of the Audit Committee is financially literate and independent of the Company and management under the applicable rules of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the NYSE listing standards. The Board has designated Dr. Hannan and Mr. Laguerre as “audit committee financial experts” under applicable SEC rules.
	For more information on the Audit Committee’s responsibilities and activities, see the “Board Oversight of Risk” and “Report of the Audit Committee” sections of this Proxy Statement.

CORPORATE RESPONSIBILITY COMMITTEE		Number of Meetings in 2023: 4
COMMITTEE MEMBERS Eric A. Reeves, Chair Martin Laguerre Manon Laroche Glenn A. Votek	KEY RESPONSIBILITIES ▪ Assists the Board in its oversight of the Company’s items of corporate responsibility that reflect the Company’s values and character, including: – corporate philanthropy – responsible investments, including social impact investments – environmental and sustainability – public policy – reputation
	For more information on the CR Committee’s responsibilities and activities, see the “Board Oversight of Risk” and “Environmental, Social and Governance” sections of this Proxy Statement.

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BOARD COMMITTEES

MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE		Number of Meetings in 2023: 8
COMMITTEE MEMBERS Vicki Williams, Chair Francine J. Bovich Thomas Hamilton Kathy Hopinkah Hannan John H. Schaefer	KEY RESPONSIBILITIES ▪ Assists the Board in overseeing the Company’s executive compensation policies and practices ▪ Reviews and recommends to the Independent Directors the approval of the compensation of the CEO ▪ Reviews and approves the compensation of the named executive officers (“NEOs”), other than the CEO ▪ Reviews, approves and recommends to the Board the adoption of equity-based compensation or incentive compensation plans ▪ Assists the Board in its oversight of the development, implementation and effectiveness of the Company’s policies and strategies relating to its human capital management, including recruiting, retention, career development, management succession, corporate culture, diversity and employment ▪ Reviews the form and amount of Director compensation ▪ Prepares the report of the Compensation Committee required by SEC rules to be included in the proxy statement
	QUALIFICATIONS Each member of the MDC Committee is independent of the Company and management under the NYSE listing standards and qualifies as a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act.
	For more information on the MDC Committee’s responsibilities and activities, see the “Compensation of Directors,” “Compensation Discussion and Analysis,” and “Report of the Compensation Committee” sections of this Proxy Statement.

NOMINATING/CORPORATE GOVERNANCE COMMITTEE		Number of Meetings in 2023: 5
COMMITTEE MEMBERS Francine J. Bovich, Chair Kathy Hopinkah Hannan Michael Haylon Eric A. Reeves Vicki Williams	KEY RESPONSIBILITIES ▪ Develops and recommends criteria for considering potential Board candidates ▪ Identifies and screens individuals qualified to become Board members and recommends to the Board candidates for nomination for election or re-election to the Board or to fill Board vacancies ▪ Develops and recommends to the Board a set of corporate governance guidelines and recommends modifications as appropriate ▪ Provides oversight of the evaluation of the Board ▪ Considers other corporate governance matters, such as Director tenure and retirement policies and potential conflicts of interest of Board members and senior management, and recommends changes as appropriate ▪ Considers continuing education alternatives for Directors and provides oversight of management’s responsibility for providing the Board with educational sessions on matters relevant to the Company and its business
	QUALIFICATIONS Each member of the NCG Committee is independent of the Company and management under the NYSE listing standards.
	For more information on the NCG Committee’s responsibilities and activities, see the “Director Criteria and Qualifications,” “Consideration of Board Diversity,” “Board Effectiveness, Self-Evaluations and Refreshment,” “Director Nomination Process,” and “Stockholder Recommendation of Director Candidates” sections of this Proxy Statement.

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BOARD COMMITTEES

RISK COMMITTEE		Number of Meetings in 2023: 5
COMMITTEE MEMBERS Thomas Hamilton, Chair Michael Haylon Manon Laroche Eric A. Reeves Glenn A. Votek Scott Wede	KEY RESPONSIBILITIES ▪ Assists the Board in its oversight of the Company’s: – risk governance structure – risk management and risk assessment guidelines and policies regarding capital, liquidity and funding risk, investment/market risk, credit risk, counterparty risk, operational risk, compliance, regulatory and legal risk and such other risks as necessary to fulfill the Committee’s duties and responsibilities – risk appetite, including risk appetite levels and capital adequacy and limits ▪ Together with the Audit Committee, jointly oversees practices and policies related to cybersecurity and receives regular reports from management throughout the year on cybersecurity and related risks
	For more information on the Risk Committee’s responsibilities and activities, see the “Board Oversight of Risk” section of this Proxy Statement.

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BOARD STRUCTURE AND PROCESSES

Board Structure and Processes

The Board is continually focused on enhancing its structure, composition and effectiveness in response to the Board’s annual self-evaluation and succession planning processes, its review of evolving best practices and feedback from the Company’s stockholder engagement efforts.

Board Leadership Structure

DAVID L. FINKELSTEIN

Chief Executive Officer and
Chief Investment Officer

MICHAEL HAYLON

Independent Chair of the Board

	Since 2019, the Board has separated the roles of CEO and Chair of the Board. While the Board believes that whether to have the same person occupy the offices of CEO and Chair of the Board should be decided by the Board from time to time in its business judgment, the Board has determined that having strong independent Board leadership in the form of an Independent Chair is in the best interests of the Company at this time. Currently, Mr. Haylon serves as Independent Chair of the Board. The separation of the CEO and Chair roles allows the CEO to focus on our overall business and strategy, while allowing the Chair to focus their attention on governance of the Board and oversight of management. The Board believes that its independent oversight function is further enhanced by its policy to hold regular executive sessions of the Independent Directors without management present and the fact that a majority of our Directors (and every member of the Audit Committee, MDC Committee and NCG Committee) is independent. In addition, the Board believes its approach to risk management ensures that the Board can choose many leadership structures while continuing to effectively oversee risk management.			The Independent Chair of the Board
				▪ Presides at meetings and executive sessions of the Board ▪ Serves as a liaison between the CEO and the Independent Directors ▪ Presides over annual meetings of stockholders ▪ Together with the Board, serves as an advisor to the CEO ▪ Participates, together with the MDC Committee, in the performance evaluation of the CEO ▪ Provides input into the selection of Committee chairs ▪ Approves Board meeting agendas and schedules ▪ Advises the CEO on the Board’s informational needs ▪ Has authority to call and chair meetings and executive sessions of the Board ▪ Authorizes the retention of advisors and consultants who report to the Board ▪ Together with the NCG Committee Chair, leads the Board’s annual performance evaluation ▪ If requested by stockholders, ensures that they are available when appropriate for consultation and direct communication with major stockholders

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Independence of Directors

NYSE listing standards 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 listing standards and has affirmatively determined that each 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 listing standards and our Corporate Governance Guidelines. However, we recognize that certain institutions would not yet view Mr. Votek as independent for purposes of serving on any of our three key Committees (Audit, MDC and NCG), and therefore the Board has determined not to appoint Mr. Votek to those Committees at this time.

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Executive Sessions of Independent Directors

Our Corporate Governance Guidelines require that the Board has regularly scheduled executive sessions of Independent Directors each year. These executive sessions, which are designed to promote unfettered discussions among the Independent Directors, are presided over by the Independent Chair of the Board. During 2023, the Independent Directors, without the participation of Board members who are members of management, held 11 executive sessions.

Board Oversight of Risk

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	The Board has overall responsibility for technology-related oversight and strategy, which includes regular updates on our overall technology strategy, potential technology disruption and emerging technology and innovation trends, along with review of the Company’s approach to major technology spending and innovations. In addition, the Board receives updates from the Audit Committee and Risk Committee, which have joint oversight of cyber and technology-related risks. The Audit Committee has specific oversight of cyber and technology risks related to financial reporting and the Risk Committee has specific oversight of cyber and technology risks related to operations. The Committees receive joint and individual presentations from management and external experts on the foregoing topics and held two joint meetings in 2023.				Dr. Hannan and Mr. Votek
					completed the Carnegie Mellon/ NACD Cyber-Risk Oversight Program and earned the CERT Certificate in Cybersecurity Oversight in 2021. In 2023, Dr. Hannon completed the NACD Master Class: Cyber-Risk Oversight Program.

The Board exercises its oversight of ESG risk primarily through the CR Committee with support from the other Board Committees, as more fully described in the “Environmental, Social and Governance” section of this Proxy Statement. In addition to the risk oversight processes outlined above, the Board annually reviews its risk assessment of the Company’s compensation policies and practices applicable to the Company’s annual cash incentive and equity incentive plans. For additional information on this review, please see the “Risks Related to Compensation Policies and Practices” section of this Proxy Statement.

CEO Performance Reviews and Management Succession Planning

The Independent Chair of the Board and the MDC Committee Chair jointly coordinate and lead the Board’s annual performance evaluation of the CEO, which reflects input from all Non-Employee Directors. The Board, led by the MDC Committee, oversees and maintains a succession plan for the CEO and other senior executives. Executive succession and talent development are a regular agenda item for the Board and, at least once per year, the Board has a fulsome discussion of talent at each business and functional leadership level across the Company. In carrying out this function, the Board endeavors to ensure that the Company’s management has the capabilities to cause the Company to operate in an efficient and business-like fashion in the event of a vacancy in senior management, whether anticipated or sudden.

Board Effectiveness, Self-Evaluations and Refreshment

Our comprehensive Board and Committee refreshment and succession planning process is designed to ensure that the Board and each Committee is comprised of highly qualified Directors, with the independence, diversity, skills and perspectives to provide strong and effective oversight. The Board, led by the NCG Committee, annually evaluates the composition of the Board and each Committee and rigorously evaluates individual Directors to ensure a continued match of their skill sets and tenure against the needs of the Company. Following the election of Martin Laguerre as a new Independent Director in March 2023 and the retirement of the Company’s co-founder Wellington J. Denahan from the Board in May 2023, the NCG Committee determined to initiate a targeted Board search process to identify and elect Director candidates with specific expertise in mortgages and Agency MBS. Manon Laroche was identified as a potential Director nominee by a member of management and Scott Wede was identified as a potential Director nominee by a member of the Board. Both Ms. Laroche and Mr. Wede were considered as part of an extensive and careful search, which involved numerous other candidates proposed by Directors, members of management and external advisors. As a result of this process, the Board elected Ms. Laroche and Mr. Wede as new Independent Directors effective October 1, 2023.

The NCG Committee is also responsible for overseeing an annual self-evaluation process for the Board. The self-evaluation process seeks to identify specific areas, if any, that need improvement or strengthening in order to increase the effectiveness of the Board as a whole and its members and Committees.

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ANNUAL SELF-EVALUATION PROCESS

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	Focus areas of the 2023 self-evaluation, which was conducted by way of individual Director interviews facilitated by a third-party governance expert, included Board and Committee leadership structure, dynamics, priorities, skills, processes and fulfillment of responsibilities. Based in part on the results of the 2023 self-evaluation process, the Board’s practices evolved in a number of ways during 2023, including:							Decisions Made in Response to 2023 Self-Evaluations
								▪ Determination to identify additional Directors with mortgage and Agency MBS expertise ▪ Increased focus on a formalized Board Chair succession planning process to identify and vet potential Board Chair candidates ▪ Identified additional priority topics for Board’s 2024 agenda

Director Criteria and Qualifications

The NCG Committee seeks to achieve a balance of knowledge, experience and capability on the Board and considers a wide range of factors when assessing potential Director nominees, including a candidate’s:

▪

Background,

▪

Skills,

▪

Expertise,

▪

Diversity,

▪

Accessibility, and

▪

Availability to serve effectively on the Board.

All candidates should (i) possess the highest personal and professional ethics, integrity and values, exercise good business judgment and be committed to representing the long-term interests of the Company and (ii) have an inquisitive and objective perspective, practical wisdom and mature judgment. It is expected that all Directors will have an understanding of our business and be willing to devote sufficient time and effort to carrying out their duties and responsibilities effectively.

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Consideration of Board Diversity

We endeavor to have a Board representing diverse backgrounds and a wide range of professional experiences. Our Corporate Governance Guidelines reflect the Board’s commitment to seeking out highly qualified candidates of diverse gender and race/ethnicity, as well as taking into account other factors that promote principles of diversity, including diversity of a candidate’s perspective, background, nationality, age and other demographics. The NCG Committee instructs any search firm it engages to include candidates of diverse gender and race/ethnicity in every Director candidate pool presented to the NCG Committee.

The Corporate Governance Guidelines formalize the Board’s commitment to seeking out highly qualified candidates of diverse gender and race/ethnicity.

Director Nomination Process

The NCG Committee is responsible for identifying and screening nominees for Director and for recommending to the Board candidates for nomination for election or re-election to the Board or to fill Board vacancies. The NCG Committee also seeks to maintain an ongoing list of potential Board candidates. Nominees may be suggested by:

▪

Directors,

▪

Members of management,

▪

Stockholders, or

▪

Professional search firms.

In evaluating a Director nomination, the NCG Committee may review materials provided by the nominator, a professional search firm or any other party.

Stockholder Recommendation of Director Candidates

Stockholders who wish the NCG Committee to consider their recommendations for Director candidates should submit their recommendations in writing to:

Anthony C. Green
Chief Corporate Officer,
Chief Legal Officer and Secretary
Annaly Capital Management, Inc.
1211 Avenue of the Americas
New York, NY 10036

Following verification of the stockholder status of persons proposing candidates, recommendations are aggregated and considered by the NCG Committee at a regularly scheduled or special meeting. If any materials are provided by a stockholder in connection with the recommendation of a Director candidate, such materials are forwarded to the NCG Committee. Properly submitted recommendations by stockholders will receive the same consideration by the NCG Committee as other suggested nominees. Stockholders wishing to nominate an individual for election as a Director, rather than recommend a nominee to the Board, must follow the procedures set forth in our bylaws and abide by the timeline set forth on page 71 under the heading “Stockholder Proposals and Nominations.”

Communications with the Board

Stockholders and other persons interested in communicating with an individual Director (including the Independent Chair of the Board), the Independent Directors as a group, any Committee of the Board or the Board as a whole, may do so by submitting such communication to:

Annaly Capital Management, Inc.
[Addressee]
1211 Avenue of the Americas
New York, NY 10036

Phone
1-888-8 ANNALY

Facsimile
(212) 696-9809

Email
investor@annaly.com

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The Legal Department reviews all communications to the Directors and forwards those communications related to the duties and responsibilities of the Board to the appropriate parties. Certain items such as business solicitation or advertisements, product-related inquiries, junk mail or mass mailings, resumes or other job-related inquiries, spam and unduly hostile, threatening, potentially illegal or similarly unsuitable communications will not be forwarded.

Director Attendance

In 2023, the Board held 12 meetings. All Directors attended at least 75% of the aggregate number of meetings of the full Board and the Committees on which they served, during the period in which they served, in 2023.

The Company encourages each member of the Board to attend the Annual Meeting. All of our then-Directors attended the 2023 Annual Meeting of Stockholders (the “2023 Annual Meeting”).

Board Commitment and Over-Boarding Policy

The Company’s enhanced Director “over-boarding” policy provides that:

▪

Directors should not serve on more than three other public company boards in addition to the Company’s Board;

▪

Directors who also serve as CEOs or hold equivalent positions at other companies should not serve on more than one other public company board in addition to the Company’s Board; and

▪

A member of the Audit Committee should not serve on the audit committee of more than two other public companies.

The Company’s “over-boarding” policy limits the number of outside boards on which our Directors can serve.

Director Orientation and Continuing Education

The Board believes that Director orientation and continuing education is critical to each Director’s ability to fulfill their responsibilities in a dynamic and constantly evolving business environment. New Directors participate in a robust onboarding process, which includes extensive training materials and personal briefings by senior management on the Company’s strategic plans, financial statements and key policies and practices. In addition, we encourage Directors to participate in external continuing Director education programs, and we provide reimbursement for related expenses. Continuing Director education is also provided during Board meetings and as stand-alone information sessions outside of meetings. In line with our commitment to continuing Board education, the Board is a Full Board Member of the NACD, which gives Directors access to an extensive menu of Board education programs, along with research on governance trends and Board practices.

Certain Relationships and Related Party Transactions

APPROVAL OF RELATED PARTY TRANSACTIONS

The Board recognizes the fact that transactions with related persons present a heightened risk of conflicts of interests and/or improper valuation (or the perception thereof). The Board has adopted a written policy on transactions with related persons in conformity with NYSE listing standards.

Under this policy, any related person transaction, and any material amendment or modification to a related person transaction, must be reviewed and approved in advance by the Audit Committee or any other standing or ad hoc committee of the Board composed solely of Independent Directors who are disinterested or by the disinterested and Independent members of the full Board.

In connection with the review and approval of a related person transaction, management must:

▪

disclose the name of the related person and the basis on which the person is a related person, the material terms of the related person transaction, including the approximate dollar value of the amount involved in the transaction and all the material facts as to the related person’s direct or indirect interest in, or relationship to, the related person transaction;

▪

advise as to whether the related person transaction complies with the terms of agreements governing the Company’s material outstanding indebtedness that limit or restrict the Company’s ability to enter into a related person transaction;

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