Byron L. Boston
About Byron L. Boston
Byron L. Boston, age 66, is Co-Chief Executive Officer and Chairman of the Board of Dynex Capital (DX). He has served as a director since 2012, Chairman since December 2023, CEO from January 2014 to June 2024, and Co-CEO since July 2024; prior roles include President (2012–2020) and Chief/Co-Chief Investment Officer (2008–2023) . He holds an A.B. in Economics and Government from Dartmouth College and an MBA (Accounting/Finance) from the University of Chicago Booth School of Business . Company performance in 2024 included $106.2M GAAP net income to common, 7.4% total economic return, 13.7% total shareholder return, and $1.60/share dividends, with period-end book value per share of $12.70 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Dynex Capital | CEO; Co-CEO; Chairman; President; Chief/Co-Chief Investment Officer | CEO 2014–Jun 2024; Co-CEO Jul 2024–present; Chairman since 2023; President 2012–2020; CIO/Co-CIO 2008–2023 | Led strategy driving long-term net gains and economic return; instrumental in growing DX post-2008 |
| Freddie Mac | Investment leader | ~6 years | Developed and led initial plan to grow retained portfolio |
| Credit Suisse First Boston | Fixed income bond trader (MBS) | >10 years | Mortgage-backed securities trading expertise |
| Lehman Brothers | MBS bond trader | >2 years | Mortgage-backed securities trading |
| Sunset Financial Resources (mortgage REIT) | Builder/leader | Prior to DX | Built a mortgage REIT specializing in high-quality loans/securities |
External Roles
| Organization | Capacity | Committee/Focus | Notes |
|---|---|---|---|
| NAREIT | Advisory Board of Governors; Chair of mREIT Council | Industry leadership | Represents the industry nationally |
| Salzburg Global Seminar | Board member | Chair of Investment and Finance Committees | Governance/oversight roles |
| Mortgage Bankers Association | Former board service | — | Prior leadership engagement |
Fixed Compensation
| Metric | 2023 | 2024 | 2025 (as of Jan 1, 2025) |
|---|---|---|---|
| Base Salary ($) | $850,000 | $900,000 | $900,000 |
Performance Compensation
Annual Cash Incentive Plan (2024 outcome)
| Metric | Weight | Target | Actual/Result | Payout vs Target | Notes |
|---|---|---|---|---|---|
| Change in absolute BV/share | 27.5% | 0% to 10% | (4.6)% | 54.2% | 14.9% weighted contribution |
| Relative BV/share | 27.5% | 55% percentile | 83% percentile | 200% | 55.0% weighted contribution |
| Capital raising | 10.0% | $100M | $332M | 200% | 20.0% weighted contribution |
| Expense management | 5.0% | 3.75% of avg equity | 3.51% | 140.3% | 7.0% weighted contribution |
| Strategic objectives | 30.0% | 100% | Exceptional (Committee: 200%) | 200% | 60.0% weighted contribution |
| Total | 100% | — | — | 156.9% | — |
Byron’s 2024 cash bonus: base $900,000; target 200% ($1.8M); payout at 156.9% of target = $2,824,433 (paid in 2025) .
Long-Term Equity Incentive (granted 3/8/2024; 60% PSUs / 40% RSUs)
| Component | 2024 Grant Value ($) | Target PSUs (#) | RSUs (#) | Vesting |
|---|---|---|---|---|
| PSUs (TER-based) | $1,905,738 grant-date fair value | 152,459 | — | Cliff vest at 12/31/2026 based on performance; settle by 3/15/2027 |
| RSUs (time-based) | $1,270,500 grant-date fair value | — | 101,640 | Equal tranches on 3/10/2025, 2/28/2026, 2/28/2027 (accel. on retirement) |
| Total | $3,176,238 | — | — | — |
PSU design (2024–2026 performance period): 50% Absolute TER; 50% Relative TER vs peer group (AGNC, Annaly, Armour, Invesco Mortgage Capital, Orchid Island, Two Harbors). Absolute TER annual target 9% (threshold 4%, max 14%); Relative TER target 55th percentile (threshold 30th, max 80th). Vesting capped at target if absolute TER or TSR is negative .
Realized Equity (2024 vesting)
| Date | Price ($/sh) | Shares Vested | Value ($) |
|---|---|---|---|
| 2/23/2024 | 12.22 | 14,291 | 174,636 |
| 2/28/2024 | 12.15 | 8,617 | 104,697 |
| 3/8/2024 | 12.50 | 25,346 | 316,824 |
| 3/10/2024 | 12.50 | 15,781 | 197,263 |
| 9/8/2024 | 12.47 | 38,643 | 481,878 |
| Total 2024 | — | 102,678 | 1,275,298 |
Equity Ownership & Alignment
| Item (as of 3/12/2025 unless noted) | Detail |
|---|---|
| Beneficial ownership (common) | 660,993 shares; <1% of outstanding (96,202,122 shares outstanding) |
| RSUs counted as “presently exercisable” due to retirement eligibility | 160,793 RSUs (grant dates: 3/10/2023, 3/8/2024, 2/21/2025) included in beneficial ownership; retirement eligible since Nov 2023 |
| RSUs excluded (no retirement eligibility) | 78,454 RSUs granted 9/8/2023 excluded |
| PSUs excluded (target) | 224,191 PSUs at target (2023–2026 cycles) excluded |
| Pledging/Hedging | None of the shares are pledged; pledging and hedging prohibited by policy |
| Executive stock ownership guideline | CEO/Co-CEO: 5x base salary; all execs in compliance or within grace period as of 12/31/2024 |
Vesting calendar and potential selling windows (indicative): RSUs vest in equal installments with tranches on 2/23/2025 (from 2/23/2022 grant), 2/28/2025 and 2/28/2026 (from 3/10/2023 grant), 9/8/2025 and 9/8/2026 (from 9/8/2023 grant), and 3/10/2025, 2/28/2026, 2/28/2027 (from 3/8/2024 grant) . PSUs cliff vest based on performance at 12/31/2025 (2023 grant) and 12/31/2026 (2024 grant) .
Employment Terms
| Provision | Key terms |
|---|---|
| Agreement effective | New agreements in 2024, effective 7/19/2024 |
| Term and renewal | Initial term through 10/27/2026; automatic one-year renewals unless 90-day notice; CoC automatically extends term for 2 years (unless >2 years remaining) |
| Cash incentive opportunity (2024) | Target 200% of base; max 400% |
| LTI approach | Annual RSUs (3-year ratable) and PSUs (3-year performance) under 2020 Plan |
| Severance (no CoC) | If terminated without Cause or resign for Good Reason: lump sum severance, continued benefits, prorated cash incentive (≥ target on financial, max on non-financial/individual), and full vesting of unvested equity per award terms (release required) |
| CoC severance (double trigger) | If terminated without Cause or resign for Good Reason within 2 years post-CoC (and for Mr. Boston also 6 months pre-CoC): enhanced lump sum, continued benefits, prorated cash incentive, and full vesting per award terms |
| 280G tax | “Best net” cut to avoid excise tax if it increases after-tax value; no gross-ups |
| Restrictive covenants | Confidentiality (5 years; indefinite for certain info), non-solicit (12 months), non-compete (90 days if no severance; 6 months if severance; 24 months if enhanced CoC severance) |
| Clawback | Dodd-Frank 10D-1 compliant policy and discretionary felony-based clawback; applies to cash and equity |
Potential payments (illustrative, assuming termination on 12/31/2024; stock $12.65):
- Termination without cause / Good Reason (no CoC): Severance $6,412,451; accelerated stock awards $5,356,429; benefits $50,510; total $11,819,390 .
- CoC + qualifying termination: Severance $9,586,615; accelerated stock awards $5,356,429; benefits $75,765; total $15,018,809 .
- Death: Lump sum $3,206,226; accelerated stock awards $5,356,429; total $8,562,655 .
Performance & Track Record (Company)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net income (loss) to common (GAAP) ($M) | 135.5 | (13.8) | 106.2 |
| Comprehensive income (loss) to common (GAAP) ($M) | (52.6) | 9.0 | 92.2 |
| Net income per common share (GAAP) ($) | 3.19 | (0.25) | 1.50 |
| Dividends per common share ($) | 1.56 | 1.56 | 1.60 |
| Total economic return (%) | (9.4) | 1.0 | 7.4 |
| ROE – GAAP (%) | 17.7 | (1.7) | 11.3 |
| Total shareholder return (%) | (15.4) | 12.0 | 13.7 |
| Book value per common share (end) ($) | 14.73 | 13.31 | 12.70 |
Additional 2024 execution notes: capital raised $332M versus $100M target; expense ratio 3.51% versus 3.75% target; strategic objectives achievement at 200% per Committee .
Board Governance (Service, roles, independence)
- Roles: Chairman of the Board (since Dec 2023) and Co-CEO (since July 2024); Chair of the Investment Committee .
- Board structure: Combined Chair/CEO deemed appropriate by Board; Lead Independent Director (Dr. Julia Coronado) provides counterbalance and leads independent sessions .
- Independence: Mr. Boston is non-independent (executive); five nominees determined independent (Crawford, Gray, Coronado, Chandoha, Palmer) .
- Committees: Audit, Compensation, and Nominating committees comprised solely of independent directors; Mr. Boston chairs Investment Committee .
- Meetings/attendance: 8 Board and 18 committee meetings in 2024; all incumbent directors attended ≥75% of applicable meetings; all then-serving directors attended the 2024 Annual Meeting .
Director Compensation (context for dual role)
Executive directors do not receive additional director fees; Mr. Boston’s compensation is reported as an executive (no extra Board pay) .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay support: ~79% approval; management/Lead Independent Director engaged top holders before/after meeting; feedback supportive .
Compensation Peer Groups (benchmarking and PSU measurement)
- Compensation benchmarking peer group (examples): Chimera Investment, Granite Point Mortgage Trust, Hannon Armstrong, MFA Financial, New York Mortgage Trust, PennyMac Mortgage Investment Trust, Redwood Trust, Two Harbors; used for market practice comparisons (excludes externally managed REITs) .
- PSU performance peer group: AGNC Investment, Annaly, Armour Residential, Invesco Mortgage Capital, Orchid Island, Two Harbors; used for relative TER metric .
Compensation Structure Analysis (alignment signals)
- Cash vs equity mix: 2024 targeted comp heavily performance-linked (~87% of Mr. Boston’s targeted pay) emphasizing equity-linked outcomes and ROE/TER .
- Incentive design: Annual cash plan balanced absolute/relative book value, capital raising, expense ratio, and strategic goals; payout at 156.9% reflects strong relative BV and capital raising despite negative absolute BV change in 2024, indicating emphasis on relative performance and strategic execution .
- Long-term metrics: PSUs tied 50/50 to absolute and relative TER with downside cap if TER/TSR is negative, mitigating risk-taking to chase awards .
- No options, no repricing: Company does not grant options/SARs and had none outstanding; uses RSUs/PSUs only .
- Governance protections: No tax gross-ups; robust clawbacks; anti-pledging/hedging policies; meaningful ownership guidelines (5x salary for CEO) .
Vesting Schedules and Potential Insider Selling Pressure
- Time-based RSU tranches scheduled on: 2/23/2025 (from 2/23/2022 award), 2/28/2025 and 2/28/2026 (from 3/10/2023 award), 9/8/2025 and 9/8/2026 (from 9/8/2023 award), and 3/10/2025, 2/28/2026, 2/28/2027 (from 3/8/2024 award). PSUs cliff vest at 12/31/2025 and 12/31/2026 if earned. These dates can create windows of incremental share delivery and potential selling activity, subject to trading policies/10b5-1 .
Risk Indicators & Red Flags
- Combined Chair/CEO role may concentrate authority, mitigated by Lead Independent Director and fully independent key committees .
- Retirement eligibility (since Nov 2023) causes certain RSUs to count as “presently exercisable” for beneficial ownership; accelerates vesting upon retirement and could impact near‑term supply if retirement occurs .
- No pledging/hedging allowed; no tax gross-ups; comprehensive clawbacks reduce misalignment risk .
- 2024 cash incentive above target despite negative absolute BV change; however, strong relative BV and strategic/capital outcomes drove payout, reflecting balanced metric framework .
Investment Implications
- Alignment: High proportion of at-risk, equity-linked compensation (PSUs/RSUs), strict ownership and anti-pledging rules, and clawbacks support shareholder alignment while PSU caps limit risk-taking in down markets .
- Retention and succession: Employment agreement auto-renewals, double-trigger CoC protections, and meaningful severance reduce near-term retention risk; retirement eligibility plus accelerated equity on retirement introduces medium-term transition risk and potential stock supply upon vesting/settlement .
- Trading signals: Concentrated RSU vesting dates (late Feb/early Mar and early Sep) and 2025/2026 PSU cliffs may create episodic supply; monitor Form 4s around those windows .
- Governance: Combined Chair/Co-CEO structure requires reliance on Lead Independent Director and independent committees; current framework appears robust with regular executive sessions and high attendance .
- Performance lens: 2024 payouts reflect strong relative performance and capital execution in a volatile rate environment; continued delivery on TER vs peers will be the key driver of PSU realization and long-term value creation .