Sergey Losyev

About Sergey Losyev

Sergey Losyev (age 44) is Co-Chief Investment Officer at ARMOUR Residential REIT (ARR), appointed on March 18, 2024 after serving as Deputy CIO since January 2020 and joining ARMOUR in 2016 . He previously co-managed more than $25 billion of Agency MBS at Deutsche Asset Management (2009–2016), and earlier was a financial programmer at Zebra Capital; he holds an MBA from Cornell, a BS in Computer Science from the University of Connecticut, and is a CFA charterholder . ARR is externally managed by ARMOUR Capital Management (ACM); executive cash compensation is paid by ACM, with ARR using long-dated, time-based equity awards and ownership guidelines to align pay with performance and retention . Company performance context during the recent period is shown below.

Company performance context during Losyev’s recent tenure

Past Roles

External Roles

Fixed Compensation

• ARR is externally managed; executive salaries/bonuses are determined and paid by ACM, not ARR, and ARR does not disclose Losyev’s cash compensation .
• Losyev was not a named executive officer (NEO) for 2024 and did not receive company-disclosed stock award compensation from ARR in 2024 .

Performance Compensation

• ARR’s equity program is time-based RSUs with long vest schedules; the company does not currently grant stock options or SARs, and did not grant performance-conditioned awards to executives in 2024; the committee may consider adding performance goals in future grants .
• Officers may elect a portion of award in cash solely to cover estimated taxes on vesting, reducing forced selling .

Equity Ownership & Alignment

• Stock ownership guidelines require Co-Chief Investment Officers to hold ARR common stock with a basis equal to $750,000, to be achieved within five years and then maintained; shares received as compensation must be retained until targets are met .
• Hedging and pledging of ARR securities are prohibited; as of the proxy date, no officers or directors had pledged shares, and the prohibition applies to all .
• Beneficial ownership (shares, vested/unvested) for Losyev is not disclosed in the 2025 proxy; NEO and director ownership is provided, but Losyev is not included in that table .

Employment Terms

• All executive officers serve at the discretion of the Board; ARMOUR appointed Losyev Co-CIO on March 18, 2024 as part of an executive transition .
• ARR is externally managed under a Management Agreement with ACM through December 31, 2029, automatically renewing in five-year terms; termination without Cause obligates ARR to pay ACM a termination fee equal to 4x the prior 12 months’ base management fees .
• Change-in-control under the Plan can lead to accelerated vesting or award conversion; termination of the Management Agreement without Cause causes all outstanding stock awards to immediately vest, though Losyev-specific outstanding awards are not disclosed .
• Clawback policy adopted October 2023 requires recovery of excess incentive compensation for executive officers after accounting restatements, regardless of misconduct, over the prior three fiscal years .

Compensation Structure Analysis

• ARR’s pay program emphasizes long-dated, time-based RSUs over options, favoring retention and alignment while limiting short-term risk-taking; no option repricing observed .
• The Compensation Committee annually reviews peer practices (AGNC, Dynex, Invesco Mortgage Capital, Annaly, Orchid Island, Two Harbors) and limits annual equity grants to ≤1.25% burn rate; no new 2024 grants to NEOs besides reallocations, signaling discipline on dilution .
• 2024 say-on-pay approval was ~86%, indicating investor acceptance of the program structure .

Risk Indicators & Red Flags

• Hedging/pledging prohibitions and ownership guidelines mitigate misalignment risks; directors are in compliance; executives’ compliance not specifically disclosed .
• ARR’s external management model can obscure individual executive cash pay and reduce direct pay-for-performance transparency for non-NEO officers like Losyev .
• Change-in-control and Management Agreement termination can accelerate vesting of awards; potential retention risk depends on award balances which are not disclosed for Losyev .

Say-on-Pay & Shareholder Feedback

• 2024 advisory vote approval of executive compensation: ~86% .
• ARR conducted investor outreach to institutions holding ~43% of common shares as of year-end 2024 to discuss compensation and governance practices .

Expertise & Qualifications

• MBA (Cornell); BS Computer Science (UConn); CFA charterholder; deep Agency MBS and structured products expertise from institutional roles, with operational programming background supporting analytics .

Work History & Career Trajectory

Investment Implications

• Alignment: Co-CIO ownership target ($750k basis) plus anti-hedging/pledging and clawback policy support long-term alignment and reduce hedging-related risk; directors are in compliance, executives’ compliance not stated .
• Transparency: As a non-NEO, Losyev’s cash compensation and personal equity holdings are not disclosed; monitoring future proxies and any Form 4 filings will be important for assessing insider selling pressure and equity alignment .
• Retention/trading pressure: Long vest schedules (25+ quarters for officers when granted) and the ability to take cash for tax on vesting reduce forced selling; accelerated vesting on change-in-control or Management Agreement termination alters incentive horizons, but Losyev-specific award balances are undisclosed .
• Performance linkage: The committee references economic return, TSR, equity growth and cost efficiency metrics when evaluating pay and program design; with ARR’s recent negative economic returns and losses, equity-heavy pay and long vesting can strengthen focus on multi-year recovery under Losyev’s co-leadership of investment strategy .