Smriti L. Popenoe
About Smriti L. Popenoe
Smriti L. Popenoe is Co-Chief Executive Officer and President of Dynex Capital, Inc., and has served as a director since 2023; she was promoted to Co-CEO (while retaining President and CIO responsibilities) effective July 22, 2024, and ceased serving as CIO in January 2025 when T.J. Connelly was appointed CIO . She has 30+ years in capital markets and risk management, previously holding senior roles at PHH Corporation, Wells Fargo/Wachovia, Sunset Financial Resources, and Freddie Mac; she holds the CFA designation, a B.S. in Chemistry and Environmental Science, an MBA (University of Rochester), and a Master’s-level French diploma . Company performance during 2022–2024 included total economic return of -9.4%, 1.0%, and 7.4%, ROE of 17.7%, -1.7%, and 11.3%, and total shareholder return of -15.4%, 12.0%, and 13.7%, respectively .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Dynex Capital, Inc. | Chief Investment Officer; President; Co-CEO | CIO (2014–Jan 2025), President (Dec 2020–present), Co-CEO (Jul 2024–present) | Accountable for raising, deploying, and managing capital; leads portfolio, hedges, and financing; advanced investment/risk practices and portfolio optimization . |
| PHH Corporation | Chief Risk Officer | 2010–2013 | Led risk management for mortgage banking and fleet outsourcing provider . |
| Wells Fargo/Wachovia Bank | Senior Vice President (Balance Sheet Management) | 2006–2009 | Managed >$100B investment portfolio; led through 2009 financial crisis . |
| Sunset Financial Resources | Senior Vice President, Investments | 2003–2006 | Built startup REIT investment platform . |
| Freddie Mac | Investment role | Early career | Managed $400B fixed-rate MBS and whole loans; foundational MBS expertise . |
External Roles
| Organization | Role | Years | Impact |
|---|---|---|---|
| Mortgage Bankers Association | Chair, Investment Committee | 2020–2024 | Guided investment committee at leading industry association . |
| Industrial Indicators, Inc. (d/b/a SmartBolts) | Director | Current | Board oversight at industrial technology company . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 | 2025 (in effect Jan 1) |
|---|---|---|---|---|
| Base Salary ($) | $700,000 | $750,000 | $844,295 (reflects mid-year increase upon promotion) | $900,000 |
Performance Compensation
Annual Cash Incentive Plan – 2024 design, targets, and outcomes
| Metric | Weighting | Minimum | Target | Maximum | Actual/Value Achieved | Payout vs Target |
|---|---|---|---|---|---|---|
| Change in absolute book value per share | 27.5% | -10.0% | —% | 10.0% | -4.6% | 54.2% |
| Relative book value per common share | 27.5% | 30%ile | 55%ile | 80%ile | 83%ile | 200.0% |
| Capital raising | 10.0% | $50mm | $100mm | $150mm | $332mm | 200.0% |
| Expense management | 5.0% | 4.35% of avg equity | 3.75% | 3.15% | 3.51% | 140.3% |
| Strategic objectives | 30.0% | 0% | 100% | 200% | N/A | 200.0% |
| Weighted average achievement | 100% | — | — | — | — | 156.9% |
| Smriti L. Popenoe – 2024 Annual Cash Incentive Outcome | Value |
|---|---|
| Base salary (12/31/2024) | $900,000 |
| Target incentive % | 200% |
| Target incentive $ | $1,800,000 |
| Maximum incentive % | 400% |
| Maximum incentive $ | $3,600,000 |
| Weighted achievement | 156.9% |
| Cash bonus earned (paid in 2025 for 2024 performance) | $2,824,433 |
Long-Term Equity Incentive Compensation (EIC)
| 2024 Award Type | Grant date | Units | Vesting | Grant date fair value ($) |
|---|---|---|---|---|
| Performance Stock Units (PSUs) | 3/8/2024 | 108,197 target | Cliff vest 12/31/2026; earned 0–200% based on 3-year TER metrics; paid by 3/15/2027; dividend equivalents only if earned | $1,352,463 |
| Restricted Stock Units (RSUs) | 3/8/2024 | 72,131 | Time-based, vest in equal installments over 3 years; dividend equivalents only if vested | $901,638 |
| 2024 total long-term EIC value | — | — | — | $2,200,000 (allocation basis) |
| PSU Performance grid (2024–2026 performance period) | Threshold | Target | Maximum |
|---|---|---|---|
| Absolute TER (50% weight) – per-share TER and % increase | $1.60; 12% | $3.59; 27% | $5.59; 42% |
| Absolute TER vesting | 50% | 100% | 200% |
| Relative TER (50% weight) – percentile vs peer group | 30th | 55th | 80th |
| Relative TER vesting | 50% | 100% | 200% |
| Vesting cap | If absolute TSR/TER negative, capped at target |
Note: PSUs granted in 2022 (3-year period ending 12/31/2024) vested at 0% (absolute TER), 100% (relative TER), and 200% (relative TSR) as determined post-period, with settlement in February 2025 .
Equity Ownership & Alignment
| Ownership (as of March 12, 2025) | Shares | % of common outstanding |
|---|---|---|
| Beneficial ownership – common | 192,668 (includes 4,780 shares in spouse’s IRA) | <1%* |
- Unvested awards excluded from “beneficial ownership”: 215,665 RSUs and 163,117 target PSUs (subject to vesting >60 days post record date) .
- No shares pledged; company policy prohibits pledging, margin, hedging, and derivative transactions .
- Executive stock ownership guidelines: Co-CEO multiple of base salary = 5x; unvested RSUs count; PSUs do not; full retention of after-tax vested shares until in compliance; all executives met or were within grace periods as of Dec 31, 2024 .
Stock awards vested in 2024:
| Date | Price ($/share) | Shares vested | Value realized ($) |
|---|---|---|---|
| 2/23/2024 | 12.22 | 9,397 | 114,831 |
| 2/28/2024 | 12.15 | 5,780 | 70,227 |
| 3/8/2024 | 12.50 | 17,002 | 212,525 |
| 3/10/2024 | 12.50 | 12,083 | 151,038 |
| 9/8/2024 | 12.47 | 38,643 | 481,878 |
| Total | — | 82,905 | 1,030,499 |
2024 “All Other Compensation” components (illustrative of alignment and perquisites):
| Component | Amount ($) |
|---|---|
| Dividends on unvested restricted stock | 62,226 |
| Dividend equivalents paid upon settlement of vested RSUs/PSUs | 142,611 |
| 401(k) matching contributions | 20,700 |
| Executive health program | 7,489 |
| Total other compensation | 233,026 |
Employment Terms
| Term element | Details |
|---|---|
| Agreement effective date | July 22, 2024 (updated Employment Agreement) . |
| Initial term and renewal | Term through October 27, 2026; auto-renews annually unless 90-day notice; extends 2 years automatically upon Change in Control (CIC) unless >2 years remain in initial term . |
| Base salary | $900,000; cannot be reduced below current without consent; cannot be decreased following CIC . |
| Annual cash incentive opportunity | Target: ≥200% of base; Max: ≥400% of base . |
| Long-term incentive minimum target | $3,100,000 beginning with 2025 grant (increased from $2,200,000) . |
| Severance (without cause/Good Reason, non-CIC) | Cash severance: $5,959,249; benefits: $74,067; accelerated equity vesting value: $4,163,357; total: $10,196,673 (as of 12/31/2024 assumptions) . |
| Severance (double-trigger CIC) | Cash severance: $8,909,077; benefits: $111,101; accelerated equity vesting value: $4,163,357; total: $13,183,535 (as of 12/31/2024 assumptions) . |
| Death | Lump-sum severance: $2,979,624; accelerated equity vesting: $4,163,357; total: $7,142,981 . |
| Restrictive covenants | Non-compete: 6 months after termination if severance paid; 24 months if enhanced CIC severance; Non-solicit: 12 months; Confidentiality: 5 years (or longer for trade secrets) . |
| Clawback and 280G | Mandatory clawback compliant with SEC/NYSE; discretionary felony clawback; “best net” approach for 280G excise tax mitigation (reduce only if higher after-tax benefit) . |
| Tax gross-ups | None (company prohibits tax gross-ups) . |
Board Governance
- Board service: Director since 2023; serves on the Investment Committee; not independent (executive officer and director) .
- Committee structure: Audit (Chair: Joy Palmer), Compensation (Chair: Julia Coronado), Nominating & Corporate Governance (Chair: Marie Chandoha), Investment (Chair: Byron Boston); 2024 committee meetings: Audit 8, Compensation 4, Investment 3, Nominating 3 .
- Board attendance: In 2024, eight Board meetings and 18 committee meetings; all incumbent directors attended ≥75% of meetings .
- Leadership model: Combined Co-CEO/Chairman (Byron L. Boston) with a Lead Independent Director (Julia L. Coronado) overseeing executive sessions and independence; Board reviews leadership structure periodically .
- Director compensation: Employee directors (including Ms. Popenoe) receive no additional board fees; non-employee director program features annual cash retainer ($100,000), equity grant (~$120,000 RS), committee/lead/chair fees, and equity vesting generally at one year .
Compensation Committee and Peer Benchmarking
- Compensation Committee: Independent directors (Chair: Julia L. Coronado; members: Alexander Crawford, Andrew Gray); uses independent consultant Ferguson Partners Consulting (FPC) for program review and non-employee director benchmarking; assessed comp-risk in Feb 2025 and found not likely to have material adverse effect .
- Compensation peer group (level-setting): Chimera Investment Corporation; Granite Point Mortgage Trust; Hannon Armstrong; MFA Financial Inc.; New York Mortgage Trust; Pennymac Mortgage Investment Trust; Redwood Trust; Two Harbors Investment Corp. .
- Say-on-pay: 79% approval at 2024 annual meeting; outreach to top 25 investors indicated supportive feedback .
Performance Compensation Structure Analysis
- Mix and change: In 2024, Ms. Popenoe’s total compensation was $6,155,854 (salary $844,295; stock awards $2,254,100; non-equity incentive $2,824,433; other $233,026); vs. 2023 total $5,506,126; cash incentive rose while stock awards decreased year-over-year; base salary increased mid-year upon promotion .
- Metrics rigor: Annual cash incentive emphasizes book value change (absolute/relative), capital raising ($332mm achieved), expense efficiency, and strategic objectives; PSUs focus on absolute and relative total economic return over 3 years with negative-return caps; avoids incentivizing excessive risk .
- Equity-heavy design: Significant alignment via RSUs and PSUs with three-year vesting horizons and dividend equivalents only upon vesting/earning; no stock options outstanding, reducing repricing risk .
Risk Indicators & Red Flags
- Hedging/pledging: Prohibited; no pledged shares reported; policy bars margin accounts and derivatives trading .
- Clawbacks: Mandatory restatement-based clawback adopted (SEC/NYSE 10D-1) plus discretionary felony clawback .
- Governance concentration: Combined Chair/Co-CEO model requires strong Lead Independent oversight; independence explicitly recognized for committee governance .
- Say-on-pay: Majority support at 79%; ongoing investor engagement noted .
- Legal/related parties: Company reports no material legal proceedings involving executive officers; 8-K notes no related-party transactions requiring disclosure for Ms. Popenoe .
Equity Ownership & Upcoming Vesting Considerations
- Unvested inventory: Excludes 215,665 RSUs and 163,117 target PSUs from beneficial ownership as of 3/12/2025; 2024 vesting totaled 82,905 shares with ~$1.03mm value realized, suggesting multiple scheduled vest events in 2025–2027 could create incremental liquidity windows (subject to blackout and policy constraints) .
- Upcoming PSU settlements: 2023 grant PSUs vest 12/31/2025; 2024 grant PSUs vest 12/31/2026; negative TER/TSR cap applies .
Investment Implications
- Alignment and incentives: Strong pay-for-performance construct centered on economic return, book value stewardship, and capital formation aligns Ms. Popenoe’s incentives with shareholder value creation; long-term equity orientation and ownership guidelines support retention and alignment .
- Retention risk and economics: Robust severance and double-trigger CIC protection, combined with enhanced post-CIC non-compete, reduce near-term departure risk but increase cost of leadership transition in adverse scenarios; watch for auto-renewal cycles and CIC-related term extensions .
- Trading signals: Anticipate periodic vesting events (RSUs annually; PSUs in 2025/2026) and cash bonus payments, which can be liquidity catalysts; however, anti-hedging/pledging policy, blackout periods, and ownership guidelines temper forced selling pressure .
- Governance and oversight: Dual executive/board role (Co-CEO + Director) is balanced by independent committee structures and a Lead Independent Director; continued monitoring of say-on-pay outcomes and peer-relative TER performance is warranted for comp risk and alignment .