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SEC Filings

DEF 14A
AGNC INVESTMENT CORP. filed this Form DEF 14A on 11/04/2016
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PROPOSAL 1: APPROVAL OF THE AGNC INVESTMENT CORP. 2016 EQUITY AND INCENTIVE COMPENSATION PLAN

 

 

Why We Recommend That You Vote for Proposal 1

The 2016 Equity Plan authorizes the Compensation Committee to provide equity-based compensation in the form of stock options, appreciation rights (“SARs”), restricted shares, restricted stock units (“RSUs”), performance shares, performance units, dividend equivalents and certain other awards denominated or payable in, or otherwise based on, shares of Common Stock, plus cash incentive awards, for the purpose of providing our nonemployee directors, officers and other employees, and those of our subsidiaries, incentives and rewards for service or performance. Some of the key features of the 2016 Equity Plan that reflect our commitment to effective management of equity and incentive compensation are set forth below in this subsection.

We believe our future success depends in part on our ability to attract, motivate and retain high quality employees and directors and that the ability to provide equity-based and incentive-based awards under the 2016 Equity Plan will be critical to achieving this success. We would be at a severe competitive disadvantage if we could not use share-based awards to recruit and compensate our employees and directors.

The use of our Common Stock as part of our compensation program is also important to our continued success because equity-based awards are expected to be an essential component of our compensation program for employees, as they can link compensation with long-term stockholder value creation and reward participants based on the Company’s performance. Our equity compensation program is also expected to help us attract and retain talent in a highly competitive market, targeting individuals who are motivated by pay-for-performance.

If the 2016 Equity Plan is not approved, we may be compelled to increase significantly the cash component of our employee and director compensation, which may not necessarily align employee and director compensation interests with the investment interests of our stockholders as well as alignment provided by equity-based awards. Replacing equity awards with cash also would increase cash compensation expense and use cash that could be better utilized if reinvested in our businesses or returned to our stockholders.

Highlights of the 2016 Equity Plan

   

The 2016 Equity Plan places specific limits on the number of shares subject to certain awards that can be granted under the 2016 Equity Plan to certain individuals during a fiscal year.

   

The 2016 Equity Plan prohibits granting discounted stock options and SARs.

   

The 2016 Equity Plan prohibits repricing or buying out underwater stock options or SARs for other awards or cash without stockholder approval.

   

The 2016 Equity Plan has no evergreen features.

   

All awards under the 2016 Equity Plan will generally be subject to “double-trigger” vesting upon a change of control.

   

The 2016 Equity Plan does not provide for any tax “gross-ups”.

   

The 2016 Equity Plan will generally be administered by our independent Compensation Committee.

   

The 2016 Equity Plan contains provisions that will enable the Compensation Committee to grant awards to certain covered employees that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, and therefore may be fully tax-deductible.

The following includes aggregated information regarding the overhang and dilution associated with the Director Plan, the Company’s only outstanding equity plan, and the potential stockholder dilution that would result if our proposed share request under the 2016 Equity Plan is approved. The information below is as of October 24, 2016. As of that date, there were 331,046,077 shares of our Common Stock outstanding.

 

6    AGNC INVESTMENT CORP. – Proxy Statement


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