David Finkelstein
Chief Executive Officer and Co-Chief Investment Officer at ANNALY CAPITAL MANAGEMENT
CEO
Executive
Board
About David Finkelstein
David L. Finkelstein, age 52, is Annaly’s Chief Executive Officer and Co‑Chief Investment Officer and has served as a Director since 2020; he was appointed CEO in March 2020 and became Co‑CIO in January 2025 . He holds a B.A. in Business Administration from the University of Washington, an M.B.A. from the University of Chicago Booth School of Business, and is a CFA charterholder . Under his leadership, Annaly delivered 2024 Tangible Economic Return of 11.9% and ranked top‑quartile versus peers on Relative Tangible Economic Return; GAAP net income for 2024 was ~$1.01B, and the company highlighted 24% MSR growth, 17% Residential Credit growth, and economic leverage of 5.5x at year‑end 2024 . The Board maintains a separate Independent Chair and has determined all Continuing Directors other than Mr. Finkelstein are independent, with frequent executive sessions (11 in 2024) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Annaly Capital Management, Inc. | Chief Executive Officer; Co‑Chief Investment Officer | CEO (Mar 2020–present); Co‑CIO (Jan 2025–present) | Led diversification across Agency, Residential Credit and MSR; drove top‑quartile 2024 relative tangible economic return and operational scaling . |
| Annaly Capital Management, Inc. | Chief Investment Officer (CIO) | Nov 2016–Dec 2021; Nov 2022–Jan 2025 | Oversaw investment strategy across cycles . |
| Annaly Capital Management, Inc. | President | Mar 2020–Dec 2022 | Executive leadership post‑internalization . |
| Annaly Capital Management, Inc. | CIO, Agency & RMBS; Head of Agency Trading | Feb 2015–Mar 2020; Aug 2013–Feb 2015 | Built and led Agency/ RMBS capabilities . |
| Federal Reserve Bank of New York | Officer, Markets Group (MBS program strategist) | 2009–2013 | Primary strategist/policy advisor for MBS purchase program . |
| Salomon Smith Barney / Citigroup / Barclays | Agency MBS trading roles | Prior to 2009 | Fixed income markets expertise . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Treasury Markets Practice Group (FRBNY‑sponsored) | Vice Chair | Current | Industry standards and market conduct forum . |
| Federal Reserve Bank of Dallas | Financial Sector Advisory Council member | Current | External advisory role . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,000,000 | 1,000,000 | 1,000,000 |
| Target Cash Incentive ($) | — | 7,000,000 | 7,000,000 |
| Target RSUs ($) | — | 4,000,000 | 4,000,000 |
| Target PSUs ($) | — | 4,000,000 | 4,000,000 |
Notes:
- In 2025, Annaly maintained 2024 target pay levels (no increase) and increased equity weighting and PSU mix prospectively (equity 55% of CEO total; PSUs 60% of equity) .
Performance Compensation
2024 incentive outcomes (cash and equity tied to 2024 performance; equity granted Feb 1, 2025)
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Variable Cash Award ($) | 5,984,000 | 7,328,100 | 8,483,650 |
| Equity Award Value for Year’s Performance ($) | 6,984,000 | 8,328,100 | 9,483,650 (RSU $4,741,825; PSU $4,741,825) |
| Total Direct Compensation ($) | 13,968,000 | 16,656,200 | 18,967,300 |
- 2024 pay mix: company indicates 95% of CEO total direct compensation was variable/performance‑based .
2024 Corporate Scorecard (determined 75% of incentive; individual 25%)
| Metric | Weight | Threshold | Target | Maximum | Actual | Multiplier |
|---|---|---|---|---|---|---|
| Relative Tangible Economic Return | 50% | 5%ile | 55%ile | 100%ile | 89%ile | 129% |
| Operating Efficiency (OpEx/Equity) | 30% | 1.60% | 1.45% | 1.30% | 1.47% | 92% |
| Market Risk (Available Financing/Equity) | 10% | 40% | 45% | 50% | 56% | 150% |
| Operational Risk (KRIs met) | 10% | 10/12 | 12/12 | N/A | 12/12 | 100% |
| Weighted Corporate Multiplier | 117% |
- Individual multiplier (CEO): 120% based on execution (e.g., 11.9% economic return; leverage 5.5x; $6.9bn available financing; 24% MSR growth; 21 securitizations/$11.0bn; $1.6bn ATM issuance) .
- Absolute Tangible Economic Return modifier added +2% (12% absolute) → final multiplier 119.75%; total 2024 incentive value $17,967,300 split 47% cash/53% equity, equity 50/50 RSU/PSU .
2024 equity grants (granted Feb 1, 2025; for 2024 performance)
| Grant | Target $ | Units | Vest/Performance |
|---|---|---|---|
| RSUs | 4,741,825 | 232,328 | Time‑based; vests in 3 equal annual installments starting Feb 1, 2026 . |
| PSUs (target) | 4,741,825 | 232,328 | 3‑yr performance period 1/1/2025–12/31/2027; 50% Relative Tangible Economic Return (with TSR governor capping at 100% if 3‑yr TSR negative), 50% Average EAD ROE; 0–150% payout across thresholds/targets . |
PSU outcomes (prior cycles)
- PSUs granted in 2022 (performance 1/1/2022–12/31/2024) paid at 125% (58th percentile Relative TER capped at 100% due to –10.79% TSR; Average EAD ROE 14.44% → 150%); CEO awarded 220,222 PSUs including dividend equivalents (target 116,048) .
2025 design changes (forward incentives)
- Scorecard applies only to cash incentives; long‑term equity generally granted at target; equity weighting increased (CEO 55% of total); PSU share increased to 60% of equity; scorecard rebalanced to 60% absolute/40% relative; Absolute TER incorporated as a metric (not a modifier). Threshold payouts widened to 50–150% .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 353,223 shares; <1% of outstanding . |
| Unvested RSUs at 12/31/2024 | 56,914 (2/1/2022); 123,045 (2/1/2023); 235,120 (2/1/2024) . |
| Unvested PSUs at 12/31/2024 | 276,843 (2/1/2023); 352,682 (2/1/2024); company notes PSUs shown assume 150% payout based on performance through 12/31/2024 . |
| Ownership guidelines | CEO must hold stock equal to 6x base salary; retention: must hold net shares for later of 1 year post‑vest or meeting guideline; unvested PSUs do not count . |
| Hedging/pledging | Prohibited for directors, executives and employees; no margin accounts or pledges . |
Employment Terms
| Topic | Terms |
|---|---|
| Severance (without cause) | CEO: 1.5x base salary + 1.5x target cash bonus; other NEOs: 1.25x salary + 1.25x target cash bonus; potential prorated bonus if terminated after March 31; subject to release and clawback recovery for “Detrimental Conduct” within 3 years . |
| CIC cash severance | No enhanced cash severance solely due to a change in control; no tax gross‑ups on CIC excise taxes . |
| Equity upon terminations/CIC | Death: RSUs vest; PSUs vest at target, prorated. Disability: RSUs vest; PSUs continue on actual performance, prorated. Qualifying termination: RSUs continue vesting; PSUs continue vesting based on actual performance (not prorated). CIC + involuntary termination or good reason: RSUs and PSUs vest in full; PSUs based on greater of target or actual at last quarter‑end; if awards not assumed, full vest at close . |
| Quantified CEO payouts (as of 12/31/2024) | Without cause (no CIC): $39,599,894 total; Without cause within 2 years of CIC: $39,599,894; Death: $15,276,145; Disability: $19,116,244 (includes accelerated/continued equity based on $18.30 stock price assumptions and PSU maximums for 2023/2024 grants per footnotes) . |
| Clawbacks | Dual policies: no‑fault restatement recovery (3 fiscal years) and misconduct‑based recovery (detrimental conduct) apply to cash and all equity . |
Board Governance (Director Service and Dual‑Role Implications)
- Board service and committees: Director since 2020; no committee service; serves as CEO and Co‑CIO (executive director, non‑independent) .
- Board leadership and independence: roles of CEO and Chair are separated; Independent Chair (transitioning to Thomas Hamilton in 2025); 8 of 9 Director nominees are independent; regular executive sessions (11 in 2024) .
- Attendance: Board held 11 meetings in 2024; all Directors met ≥75% attendance on Board/committees served .
- Implications: CEO also serving as Co‑CIO centralizes investment accountability but governance mitigants include separate Independent Chair, fully independent key committees (Audit, MDC, NCG), and executive sessions without management .
Compensation & Incentives Details (Design/metrics, peers, say‑on‑pay)
- Metrics/rigor: diversified metrics (Relative and Absolute Tangible Economic Return, Operating Efficiency, risk metrics); relative metrics require above‑median (≥55th percentile) for target; Maximum PSU payout 150%; TSR governor caps Relative TER PSU component at 100% if 3‑yr TSR negative .
- Peer groups: Compensation Peer Group spans mREITs and larger financials (e.g., AGNC, MFA, CIM, NYMT, AMG, AMP, BEN, CG, JEF, LAZ, VOYA, PFSI, RWT); Performance Peer Group focuses on mREITs including AGNC, ARR, DX, EFC, IVR, MFA, NYMT, ORC, RITM, RWT, TWO .
- Say‑on‑pay results: 2024 support ~63% (below prior five‑year ~88%), prompting program changes for 2024/2025 following engagement covering ~60% of institutional shares; Board recommends FOR say‑on‑pay in 2025 .
Performance & Track Record (select highlights, 2024)
- 2024 highlights: 11.9% economic return; top‑quartile relative performance; economic leverage 5.5x; $6.9bn total assets available for financing; Residential Credit lock volume $17.6bn and $11.7bn fundings; 21 whole‑loan securitizations totaling $11.0bn; MSR portfolio grew 24% to become third‑largest bulk MSR purchaser in 2024; $1.6bn common equity raised via ATM .
- Pay‑versus‑performance: company discloses CAP and five‑year TSR, GAAP net income, and Tangible Economic Return; 2024 GAAP net income ~$1.01B; five‑year disclosures show alignment features (e.g., TSR governor) .
Equity Grant and Vesting Schedules (2024 performance awards granted 2/1/2025)
| Award | Grant date | Amount ($) | Units | Vesting/performance |
|---|---|---|---|---|
| RSU | Feb 1, 2025 | 4,741,825 | 232,328 | 3 equal annual tranches starting Feb 1, 2026 . |
| PSU (target) | Feb 1, 2025 | 4,741,825 | 232,328 | 3‑yr period (2025–2027); 50% Relative TER (TSR governor); 50% Avg EAD ROE; 0–150% payout . |
Related Party Transactions, Hedging/Pledging, and Policies
- Related party transactions: Company states none since the beginning of 2024 requiring disclosure or approval under its related person transaction policy .
- Insider trading, hedging and pledging: policy prohibits trading on MNPI, hedging and pledging/margin accounts by directors, executives, and employees .
Compensation Committee Process and Advisors
- MDC Committee is fully independent; retains F.W. Cook as independent advisor; reviews peer data and stockholder feedback; conducts annual compensation risk assessment .
Say‑on‑Pay & Shareholder Feedback (actions taken)
| Topic | Feedback | Action |
|---|---|---|
| Scorecard complexity/rigor | Simplify, increase objectivity and absolute weighting | Streamlined scoring; removed scaling; rebalanced to 60% absolute for 2025; moved Operational Risk to individual assessment for 2025 . |
| Cash vs equity linkage | Apply scorecard only to cash incentives | From 2025, scorecard applies to cash; equity generally at target; reduces max outcomes and increases predictability . |
| Equity weighting and PSU mix | Increase equity/PSU proportions | CEO equity to 55% of total; PSUs to 60% of equity for all NEOs (from 50%) . |
| Threshold/maximum ranges | Increase downside/upside spread; lower threshold payout | 2024 payouts widened to 50–150% with greater chance of zero; removed scaling factor . |
Investment Implications
- Pay‑for‑performance alignment strengthened: higher equity/PSU weighting, quantitative cash scorecard, and TSR governor on PSUs should reduce asymmetric upside and better align with long‑term shareholder value creation .
- Retention and selling pressure: multi‑year RSU/PSU structures with robust ownership/holding rules and prohibitions on hedging/pledging mitigate forced‑sale risk; sizable unvested equity (time‑ and performance‑based) supports retention, though Form 4 activity should be monitored for 10b5‑1 driven sales around February vesting cycles .
- Change‑in‑control risk: double‑trigger equity acceleration and no CIC cash enhancements/gross‑ups reflect shareholder‑friendly design; quantified CEO severance scenarios indicate equity is the primary driver of potential payouts, underscoring sensitivity to share price and performance outcomes .
- Governance mitigants to dual executive roles: Separation of CEO and Independent Chair and fully independent key committees temper risks of CEO also serving as Co‑CIO; high executive‑session cadence supports oversight .
- Shareholder sentiment: 2024’s 63% say‑on‑pay signals elevated scrutiny; program modifications and 2025 disclosures should be tracked for improving support ahead of future votes .
All data are sourced from Annaly Capital Management’s 2025 and 2024 DEF 14A filings and related sections as cited above.