Message from our Chief Executive Officer & Chief Investment Officer
Dear Fellow Stockholders,
Looking back over the last year, it is hard to believe what we have come through and where we stand now. It is with tremendous gratitude
that I write this letter gratitude for the healthcare workers and scientists who fight against the COVID-19 pandemic, for the other essential workers who keep critical infrastructure open and functioning, and for every member of the Annaly
team. Through their continued efforts and engagement, the Company has been able to navigate unprecedented market and economic volatility and deliver outstanding performance.
The events of the last year have reinforced what we have long known at Annaly that our employees are our greatest asset.
Sustaining a diverse, inclusive and equitable environment is critical to our employees health, safety and development. It is also a business imperative as we believe it helps generate stronger returns for our stockholders. In July 2020, we
appointed the Companys first Head of Inclusion and formed an Inclusion Support Committee of Executive Sponsors. We also conducted firm-wide unconscious bias trainings to establish foundational knowledge, language and understanding to support
our efforts. The Board shares in this commitment. In 2020, the Board amended our Corporate Governance Guidelines to reflect its practice of seeking out highly qualified candidates of diverse gender and race. In addition, following the closing of the
internalization transaction on June 30, 2020, the Management Development and Compensation Committee assumed broad oversight of the Companys human capital management, including policies and strategies related to recruiting, retention,
career development, management succession, corporate culture, diversity and employment.
After a series of corporate
governance enhancements over the last few years, which includes declassifying the Board and separating the role of CEO and Chair of the Board, our decision to internalize management was a natural step along this continuum. As evidenced by the
Compensation Discussion and Analysis (CD&A) and executive compensation tables included in this proxy statement, moving to an internally-managed structure has significantly enhanced the Companys disclosure and control of
executive compensation. We are proud of the considerable steps taken to re-design the executive compensation program for 2020, which include the introduction of equity incentives, including performance-based awards, and the use of a quantitative
corporate performance scorecard that reflects both financial and non-financial goals.
Since our founding Annaly has
delivered $21 billion of common and preferred dividends and, while our stockholders are at the center of every decision we make, we continue to be invested in the needs and priorities of all stakeholders. In October, on the 23rd anniversary of our
IPO, we published our inaugural Corporate Responsibility Report, which demonstrates our commitment to transparency and robust environmental, social and governance (ESG) practices. In response to feedback from our stockholders, the report
includes supplemental disclosures under the Supplemental Accounting Standards Board (SASB) and Global Reporting Initiative (GRI) frameworks, along with the Companys first ever goals and commitments across five critical
dimensions of ESG.
While the firms comprehensive business continuity planning and infrastructure enabled us to swiftly
and successfully transition to a remote work environment in March 2020, we recognize the challenges faced by operating in one for an extended period. To address the needs of our employees, we have provided technology stipends, telemedicine benefits,
mental health resources and mindfulness sessions. We have also increased internal communications throughout the firm and sponsored virtual events to cultivate our sense of community.
Over the last year, we have spoken many times both internally and to the market about the importance of leading with purpose in response
to the trying societal and economic climate. The support and guidance of our Board empower us to do exactly that to build the Company for the long-term, to fulfill our mission of delivering competitive yield to our stockholders and to foster
a culture that develops talent and champions diversity. In particular, I would like to extend my sincere thanks to Donnell Segalas, who is stepping down from the Board after diligently representing our stockholders for more than twenty years.
On behalf of Annalys Board, it is my pleasure to invite you to the 2021 Annual Meeting of Stockholders, which will be
conducted via an interactive virtual meeting format on May 19th. We appreciate your partnership on this journey and your continued confidence in the Company.
Sincerely,
David L. Finkelstein
Chief Executive Officer & Chief Investment Officer
April 7, 2021