SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant  ☒                                          Filed by a Party other than the Registrant  ☐

Check the appropriate box:

AGNC Investment Corp.

(Name of Registrant as Specified in its Charter)

AGNC INVESTMENT CORP.

NOTICE OF 2019 ANNUAL MEETING OF

STOCKHOLDERS TO BE HELD ON APRIL 18, 2019

BY ORDER OF THE BOARD OF

DIRECTORS,

Kenneth L. Pollack

Senior Vice President and Secretary

AGNC INVESTMENT CORP. AT A GLANCE

PROXY SUMMARY

Items to Be Voted

AGNC INVESTMENT CORP. AT A GLANCE

AGNC Investment Corp. (“AGNC,” the “Company,” “we,” “our,” and “us”) is an internally-managed real estate investment trust (“REIT”) that invests primarily in residential mortgage-backed securities for which the principal and interest payments are guaranteed by a U.S. Government-sponsored entity (“GSE”) or a U.S. Government agency (referred to as “Agency” securities). We may also invest in other types of mortgage and mortgage-related residential and commercial mortgage-based securities where repayment of principal and interest is not guaranteed by a GSE or other U.S. Government agency or in other investments in, or related to, the housing, mortgage, or real estate markets. AGNC is a private source of capital supporting the U.S. housing market. AGNC’s internal management structure, Agency MBS investment focus, and scale are significant differentiators relative to other potential comparative public companies.

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AGNC INVESTMENT CORP. AT A GLANCE

Industry-Leading Performance

AGNC combines a track-record of strong financial performance with the lowest operating cost structure in the residential mortgage REIT industry. We have generated strong returns since our initial public offering (“IPO”), outperforming residential mortgage REIT peers and the broader market.

Since our May 2008 IPO through December 31, 2018, AGNC has declared $39.32 in cumulative dividends per common share, or a total of $8.5 billion in dividends paid to our stockholders and has generated a total stock return of 345%, compared to 85% for our Agency-focused residential mortgage REIT peers (collectively, the “Agency REIT Peer Group”), 105% for the residential-focused mortgage REIT universe (collectively, the “Resi mREIT Universe”), and 124% for the S&P 500. While AGNC generated an economic return of -4.9% for fiscal year 2018, we exceeded the Agency REIT Peer Group economic return of -8.5% by 3.6%, and produced a total stock return of -2.5%, compared to -13.4% for the Agency REIT Peer Group, -3.9% for the Resi mREIT Universe, and -4.4% for the S&P 500.

Qualified Leadership

The AGNC management team is led by Gary Kain, our Chief Executive Officer and Chief Investment Officer, and includes a broad mix of mortgage investment experts and industry thought leaders. This management team has a strong track record of success, as reflected in our outperformance since our IPO.

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AGNC INVESTMENT CORP. AT A GLANCE

Additionally, we recognize the importance of strong independent leadership on our Board of Directors (the “Board”) and believe that separating the positions of Chair and CEO is the best corporate governance leadership structure for us at this time. Prue Larocca, an independent director, serves as our Board Chair.

AGNC’s Board is currently comprised of six members, including five independent directors, whose diverse range of experience and backgrounds makes them highly qualified to oversee our strategy, operations, and risk management. We evaluate our Board’s backgrounds, skill sets, experience, and diversity on an ongoing basis, including as part of our annual evaluation process, to ensure they align with the Company’s go-forward strategy. We expanded the size of our Board with the appointment of Donna Blank as an independent director on December 3, 2018.

Director Nominees

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AGNC INVESTMENT CORP. AT A GLANCE

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AGNC INVESTMENT CORP. AT A GLANCE

Strong Stockholder Focus

Our internal management structure provides us a differentiated platform that is closely aligned with stockholder interests. We stand out among mortgage REITs for our transparency, focus on financial disclosure, and our high-quality governance and compensation practices.

Stockholder Engagement

Consistent with our focus on and commitment to our stockholders, we actively engage with and value the opinions of our stockholders, which have influenced the continuing evolution of our compensation program and corporate governance practices. Following our 2018 annual meeting, we conducted extensive stockholder engagement, including meetings that included our independent Board chair as well as the chair of our Compensation and Corporate Governance Committee (the “Compensation Committee”). Our Board was particularly focused on investor feedback regarding our executive compensation program in light of the low support for our 2018 advisory resolution on executive compensation.

In the fall of 2018, we sought meetings with institutional stockholders holding 80% of our institutionally-held common stock and comprising 53% of our outstanding common stock. We ultimately had conversations with investors holding 48% of the institutionally-held common stock and 32% of our total outstanding common stock, in addition to meeting with proxy advisory firms. We engaged with our retail investors, who own 34% of our outstanding common stock, at their request and through our proxy solicitation efforts.

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AGNC INVESTMENT CORP. AT A GLANCE

The following provides an overview of the common themes and areas of feedback that emerged during these conversations, and describes the changes we have implemented as a direct response to concerns voiced by our stockholders.

What We Heard				How We Are Addressing
Desire for further clarification of peer construction process and challenges				Provided additional background in the proxy statement on the limited availability of comparable peers due to the prevalence of external management structures, lack of disclosure, relative size, and unique business model (see page 43)
Preference for a greater portion of CEO compensation to be allocated to long-term incentive compensation and, within that component, a greater portion in the form of performance-based incentive awards				Amended CEO’s employment agreement to reallocate $2.7 million of target compensation from salary and annual cash bonus to performance-based long-term incentive awards such that the majority of his total annual compensation is now in the form of long-term incentives, two-thirds of which is performance-vesting (see page 48)
Request for a simplified scorecard				Further simplified metrics relative to 2018 scorecard (see page 40)
Increased disclosure regarding, and re-evaluation of, rigor of performance metrics				Performance measures evaluated annually. Enhanced the disclosure around the process for setting metrics and increased the rigor of certain performance metrics for 2019 with greater weight to financial performance (see page 36)
Desire to better understand AGNC’s business and industry				Provided enhanced disclosure in the proxy statement on our business overview, value proposition and investment strategy (see page 25)
Questions around board size, refreshment, and diversity				Recently appointed director supplements skills and experiences and enhances the diversity of our Board (see page 14)
Additional disclosure regarding risk oversight, including environmental, social, and governance (“ESG”) topics				Enhanced disclosure in the proxy statement on risk management and included discussion on our ESG practices in the proxy and on our website (see page 6)

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AGNC INVESTMENT CORP. AT A GLANCE

Executive Compensation Program Overview and Evolution

Philosophy and Structure

In connection with the internalization of our management (the “Internalization”) in July 2016, the result of the acquisition of the parent of our external manager from American Capital, Ltd. (“American Capital”), our Compensation Committee implemented a compensation program that aligns executive compensation to our financial and strategic objectives, is highly incentive-based, fully transparent, and reduces operating expenses through elimination of management fees.

We believe that it is important to maintain an appropriate and competitive compensation program that drives our key employees both in the short- and long-term and aligns the interests of our executive officers and other employees with those of our stockholders. We do not benchmark our compensation levels against comparator companies as we believe that our internal management structure combined with our size and scale relative to other mortgage REITs significantly differentiates us.

We compensate our named executive officers (“NEOs”) in a manner that balances short- and long-term compensation and cash and equity-based compensation. Our NEOs’ compensation program includes three primary elements: base salary, short-term incentives in the form of an annual cash bonus, and long-term equity incentives in the form of performance-based restricted stock units (“RSUs”) and time-based RSUs. Since our Internalization, the composition of our NEOs’ total target compensation has shifted significantly, with a greater emphasis on performance-based compensation and long-term equity. In 2018, 81% of average target compensation of our NEOs consisted of short-term and long-term incentive compensation, a 5% increase from 77% in 2017. In 2019, 85% of average NEO target compensation will be incentive based.

CEO Compensation Changes and Program Enhancements

During our stockholder engagement, a number of investors provided their view that a greater percentage of our CEO Gary Kain’s compensation should be linked to long-term performance. As a result of this feedback, the Compensation Committee and Mr. Kain engaged in discussions to amend his employment contract in a way that would significantly shift his target compensation from annual cash payments to long-term performance-based incentives. Thus, beginning on February 1, 2019, $2.7 million of Mr. Kain’s target compensation was reallocated from cash, in the form of salary and annual bonus, to performance-based long-term incentive awards. As a result of this shift, 56% of Mr. Kain’s total compensation at target will consist of long-term equity incentive awards, 67% of which will be performance-based. The details of Mr. Kain’s revised compensation are discussed further on page 48 of this proxy statement.

In addition, the Compensation Committee revised the corporate scorecard for determining incentive compensation under our short-term program for 2019. These changes are in addition to the revisions made to the 2018 scorecard increasing the weighting of financial measures and adjusting certain performance metrics. The 2019 revised scorecard is simplified and provides for increased rigor of the performance metrics relative to 2018. We also enhanced the disclosure around the process the Committee undertakes when setting metrics and goals. For a more detailed discussion of the 2019 scorecard, please see page 40.

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AGNC INVESTMENT CORP. AT A GLANCE

The following graphic shows the evolution of our compensation program since the Internalization, including recent enhancements discussed above.

The following graphic illustrates the shift in our CEO’s total compensation at target since our Internalization, with a greater emphasis on long-term equity and performance-based compensation.

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TABLE OF CONTENTS

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BOARD AND GOVERNANCE MATTERS

BOARD AND GOVERNANCE MATTERS

Our Board is currently comprised of five independent directors and our CEO. The following table sets forth the current members of our Board and their committee membership:

Board Leadership Structure

Ms. Larocca has served as our Chair and lead independent director since May 2016, and Mr. Kain has served as our Chief Executive Officer since March 2016. We recognize the importance of strong independent leadership on our Board and believe that separating the positions of Chair and Chief Executive Officer is the best corporate governance leadership structure for us at this time. Our Board has determined that all of the current directors, except Mr. Kain, are “independent” as defined in the Nasdaq rules.

It is our Board’s policy as a matter of good corporate governance to have our independent directors meet regularly without members of management or employee directors present to facilitate the Board’s effective independent oversight of management. Presently, our independent directors meet during our Board’s quarterly in-person meetings and may hold additional meetings at the request of the Chair or any other independent director.

Each of our Board’s Audit Committee and Compensation Committee is composed entirely of independent directors. These independent committees of our Board also have the authority under their respective charters to hire independent advisors and consultants, at the Company’s expense, to assist them in performing their duties. A majority of our Board’s Executive Committee also consists of independent directors.

Corporate Governance

Our Board has developed strong corporate governance practices, which are memorialized in our Corporate Governance Guidelines, to support its oversight responsibilities. These guidelines, together with our Amended and Restated Certificate of Incorporation (our “Certificate of Incorporation”), Third Amended and Restated By-laws, as amended (our “By-laws”), and committee charters of the Audit Committee and the Compensation, form the basis for performance of our governance activities. All of these documents are available in the Investors section of our website at www.AGNC.com.

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BOARD AND GOVERNANCE MATTERS

Committees of the Board of Directors

Our Board’s principal standing committees and their primary functions are described below.

Executive Committee

This committee has the authority to exercise all powers of the Board except for actions that must be taken by the full Board under Delaware law, our Certificate of Incorporation, or By-laws.

Audit Committee

This committee assists the Board in overseeing:

The Audit Committee is also responsible for engaging an independent registered public accounting firm, reviewing the plans and results of the audit engagement with the independent registered public accounting firm, approving professional services provided by the independent registered public accounting firm, and considering the range of audit and non-audit fees. The committee’s meetings include, whenever appropriate, executive sessions with our independent external auditors, without the presence of management.

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Compensation and Corporate Governance Committee

This committee’s principal functions are to:

The Compensation Committee also serves as the Board’s standing nominating committee and as such performs the following functions:

Under its charter, the Compensation Committee has the authority to select, retain, and terminate compensation consultants. In connection with the Internalization in 2016, the Compensation Committee retained Frederic W. Cook & Co., Inc. (“FW Cook”) to assist the Compensation Committee in designing and establishing a compensation structure. Since that time, the Compensation Committee has engaged FW Cook on an annual basis to advise on and assist with the review and evaluation of executive compensation and compensation of our non-employee directors.

Board and Committee Meetings

Under our By-laws and Delaware law, the Board and its committees are permitted to take actions at regular or special meetings and by written consent. The Board generally holds regular quarterly meetings and meets on other occasions as necessary. The Board held 11 regular and special meetings during 2018. In addition, the independent directors met separately in executive sessions to discuss various matters, including our performance and the performance of our Chief Executive Officer and other executive officers.

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BOARD AND GOVERNANCE MATTERS

Each of the Audit Committee and the Compensation Committee schedules regular meetings to coincide with the quarterly in-person meetings of the Board and also meets at the request of senior management or at such other times as its Chair determines. The Chair of each Committee, in consultation with our Secretary, sets the agendas for the meetings. Each committee reports to the Board on its activities at the next regularly scheduled Board meeting following its committee meetings and when appropriate. During 2018, the Audit Committee held five meetings, and the Compensation Committee held six meetings.

Each of our independent directors attended all of the meetings of the Board and committees on which he or she served in 2018. Mr. Kain was unable to attend one special meeting of the Board but attended all other meetings. Although we do not have a policy on director attendance at the Annual Meeting, directors are encouraged to attend, and each of our directors who was on the Board at that time attended the 2018 Annual Meeting in person.

Director Nomination Process

Nominations for election to the Board may be made by the Compensation Committee or by any common stockholder entitled to vote for the election of directors. Candidates recommended by common stockholders will be evaluated by the Compensation Committee under the same criteria that are applied to other candidates.

Board Membership Criteria

The Compensation Committee endeavors to identify, recruit, and nominate candidates based on the following eligibility and experience criteria: a candidate’s integrity and business ethics, strength of character, judgment, experience, and independence, as well as factors relating to the composition of the Board, including its size and structure, the relative strengths and experience of current directors, and principles of diversity, including diversity of experience, personal and professional backgrounds, race, gender, and age. The Compensation Committee recognizes the importance of diverse viewpoints, experience, and backgrounds to a well-functioning Board. Although the committee does not have formal objective criteria for diversity on our Board, it is a significant consideration, and since 2013, 75% of new director nominations have been women or minority candidates. In nominating candidates to the Board, the committee determines whether the incumbent director is willing to stand for re-election. If so, the committee evaluates his or her contributions to determine suitability for continued service, taking into consideration the Board’s criteria for candidates, the Board evaluation process, and other perceived needs of the Board. The Company maintains a corporate membership in the NACD, which provides each director with access to continuing education, research materials, and publications relating to corporate governance, board leadership, and other topical information.

Oversight of Strategy and Key Risks

Our Board is responsible for the general oversight of the Company, including our strategic direction, the performance of our executive officers, and the Company’s risk management processes, to assure that the long-term interests of our stockholders are being served. In performing this oversight function, the Board, directly or through its standing committees, regularly reviews and discusses our corporate strategy and our material strategic, operational, financial, compensation, and compliance risks with senior management.

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BOARD AND GOVERNANCE MATTERS

The Board receives updates at each regular meeting on the Company’s performance, market conditions, and other recent developments, including, among other things, the risks and opportunities facing us, as well as the strategies used to hedge the Company’s exposure to market risks, including interest rate, prepayment, and extension risks. The Board periodically reviews and discusses with management and in executive session our near and longer run strategic direction. The Board has also adopted, and regularly reviews our compliance with, various policies and procedures addressing other operational risks.

The Board believes the risk of cybersecurity is an enterprise-wide concern impacting people, processes, and operations, and in light of the pervasive and increasing threat from cyber attached to all companies, the Board believes oversight of this risk is appropriately allocated to the full Board. The Board has evaluated with management the threat to the Company after considering our operations and the types of data retained on our systems. Although our primary business involves investment in mortgages and mortgage-related instruments, we do not receive personal information on individual mortgage borrowers as part of our regular operations, as we do not perform mortgage servicing, maintain customer accounts, or provide any direct mortgage lending. The Company contracts with third party security firms to provide threat detection and conduct annual testing on our systems. The Board reviews cybersecurity and receives reports from the Company’s Senior Vice President for Information Technology on an annual basis. The Board may also receive additional updates or reports from management as necessary.

The Board also recognizes the importance of effective executive leadership to our successful execution of strategy and promotion of an ethical and professional culture throughout our organization. The Board is actively engaged in overseeing succession planning and our human capital management. The Board and the Compensation Committee routinely review staffing for critical roles, considering the operational needs of the Company and the potential leadership, industry knowledge, and investment skills of existing employees. The Board and Compensation Committee remain interested in the engagement of the Company’s employees and discuss with senior management results of engagement surveys conducted with employees. Executives and other key employees in the Company are given exposure to the Board during meetings and other events to assist with their development and the Board’s evaluation. In addition, the Board is regularly updated on management’s strategies for recruiting, developing, and retaining outstanding personnel and minimizing employee turnover, as applicable. These strategies include the Company’s broad-based long-term incentive compensation program which make grants of RSUs to all employees at every level of the Company, thereby further aligning the interest of all of our employees with our stockholders.

The Board has delegated certain risk management oversight responsibility to its committees as follows:

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BOARD AND GOVERNANCE MATTERS

A diagram of our Board’s allocation of risk management responsibility is as follows:

Corporate Responsibility

We understand the importance of incorporating environmental and social considerations into our business and day-to-day operations. We consider the interests of all our stakeholders – our stockholders, employees, lenders and other counterparties, vendors, and community – in pursuing the long-term success of our business.

Environmental Considerations

As an investment firm with 56 office-based employees, our business operations have a relatively modest environmental impact. Nevertheless, we do consider environmental risk factors and strive to use resources efficiently and responsibly.

Our corporate efforts to reduce our environmental impact include:

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BOARD AND GOVERNANCE MATTERS

Social Considerations

AGNC’s primary social considerations and impacts relate to our investment activity and human capital management, both of which are critical to our success as an organization.

Investment Activity

As a provider of private capital to the U.S. housing market through our investments in residential mortgages, our business enhances liquidity in the residential real estate mortgage markets and, in turn, facilitates home ownership in the U.S. As of December 31, 2018, AGNC had over $90 billion in aggregate mortgage and mortgage-related investments. AGNC is also a substantial investor in “lower balance” and high loan-to-value (“LTV”) loans, including those originated under the Home Affordable Refinance Program (“HARP”), both of which support mortgage types that have been historically disfavored by mortgage originators or investors. In aggregate, lower balance and high LTV loans, including HARP loans, constituted approximately 51%, or over $46 billion, of our investment portfolio as of December 31, 2018.

Human Capital Management

As an employer, we have a responsibility to our most important asset, our employees. We are committed to providing our employees an engaging, supportive, and inclusive atmosphere in which to grow professionally and contribute. We recognize the importance of ongoing communication and engagement with our employees through direct channels, facilitated by our small employee base. In addition, we provide a hotline where employees can submit claims or report suspected abuses anonymously. We recently completed an anonymous employee survey, and the Company had an over 90% satisfaction rating in many areas, including AGNC’s treatment of its employees, physical working conditions, commitment to integrity, and overall culture and environment. Based on the results of this survey, our Board and management are working to implement a number of ideas and recommendations that we received from employees.

We are also committed to promoting equality and further increasing diversity within our workforce. We were recently recognized as one of 230 companies selected for the 2019 Bloomberg Gender-Equality Index for our commitment to transparency in gender reporting and advancing women’s equality.

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BOARD AND GOVERNANCE MATTERS

Finally, we pride ourselves on providing a wide selection of resources to protect our employees’ health, well-being, financial security, safety, and work-life balance, including:    

To learn more, please visit the Corporate Responsibility section of our website at www.agnc.com/corporate-responsibility or email CR@agnc.com.

Director Compensation

As described in more detail below, we compensate our independent directors with cash retainers and equity-based awards. Directors who are employees of the Company or our subsidiaries do not receive any compensation for service as a member of the Board although we reimburse all directors for travel expenses incurred in connection with Board and committee meetings and Board-related functions. The Compensation Committee periodically reviews the form and amount of compensation paid to our independent directors to ensure it remains consistent with quality corporate governance practices. In these reviews, the Compensation Committee regularly consults with FW Cook for advice on the design and structure of the program, information on recent trends and developments in non-employee director compensation, general industry data, and analyses of the competitiveness of our non-employee director compensation levels relative to comparable companies. Based on its review, the Board has concluded that the compensation paid to the independent directors for service on the Board, including the retainers for Board and committee chair positions, is reasonable in light of the work required in each role.

Independent directors receive a cash retainer for service on the Board at the rate of $100,000 per year, payable quarterly in advance. The Chairs of our Audit Committee and Compensation Committee each receive an additional annual retainer of $25,000, each payable quarterly in advance. Our Chair receives an additional annual retainer of $50,000, payable quarterly in advance.

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BOARD AND GOVERNANCE MATTERS

The Board believes that a substantial portion of director compensation should consist of equity-based compensation to assist in aligning the long-term interests of our directors with those of our stockholders. On April 19, 2018, each of our independent directors serving on the Board at that time received 6,680 RSUs under the AGNC Investment Corp. 2016 Equity and Incentive Compensation Plan (the “2016 Plan”), which is described in more detail below. The RSUs vest on April 19, 2019, subject to the director’s continued service on our Board through the vesting date. Each RSU represents the right to receive an equivalent number of shares of our common stock, plus dividend equivalents, subject to the terms of the 2016 Plan.

The following table sets forth the compensation received by each independent director during 2018:

The 2016 Plan

The Company maintains the 2016 Plan, which allows us to provide our directors, executive officers, and other employees with equity incentive compensation. Subject to adjustment as described in the 2016 Plan, total awards under the 2016 Plan are limited to 10,000,000 shares, inclusive of dividend equivalents paid on such awards. These shares may be shares of original issuance or treasury shares or a combination of the two. Pursuant to the 2016 Plan, the Company may grant stock options, stock appreciation rights, restricted shares, restricted stock units, performance shares, performance units, cash incentive awards, certain other awards based on or related to our common stock, and dividend equivalents paid with respect to awards under the 2016 Plan. Awards may be time-vested or performance-vested.

The 2016 Plan authorizes the Compensation Committee to provide equity-based compensation in the form of stock options, appreciation rights, restricted shares, restricted stock units, 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 non-employee directors, officers, and other employees, and those of our subsidiaries, incentives and rewards for service or performance. The 2016 Plan places a limit on the dollar value of awards and other compensation that may be made to a director in any year. The grant agreements for grants awarded under the 2016 Plan permit members of our Board to defer distribution of their awards for a period of up to ten years.

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BOARD AND GOVERNANCE MATTERS

Independent Director Plan

In connection with our IPO, we established the American Capital Agency Corp. Equity Incentive Plan for Independent Directors (the “Independent Director Plan”), which provided for the issuance of equity-based awards, including stock options, restricted stock, restricted stock units, unrestricted stock awards, and other awards based on our common stock that may be made by us to our independent directors. The Independent Director Plan was terminated when our stockholders approved the 2016 Plan on December 9, 2016, except with respect to then outstanding awards. Restricted stock units awarded under the Independent Director Plan conferred to the participant the right to receive cash, common stock, or other property, as determined by the plan administrator, having a value equal to the number of shares of our common stock that were subject to the award. The holders of awards of restricted stock units were entitled to receive dividend equivalents, which in either case could be payable immediately or on a deferred basis and could elect to defer distribution of their equity-based awards for a period of up to ten years.

Stock Ownership Guidelines

Our Board believes that directors more effectively represent the best interests of the Company if they are stockholders themselves. Thus, independent directors are encouraged to own shares of our common stock equal in value to 3x the annual cash Board retainer (which is $100,000) within the later of five years of joining the Board or January 24, 2022. Shares of deferred or restricted stock or units (both vested and unvested and including shares for which a deferral election was made) granted to directors under the Independent Director Plan and the 2016 Plan are included in determining the number of shares held for this purpose. Until the stated minimum is met, each independent director must retain at least 50% of the shares of common stock received upon vesting, net of any shares withheld or sold to pay or reimburse taxes on such income.

In addition, our Board has adopted a policy prohibiting our directors and executive officers from any hedging, pledging, or entering into margin loans with respect to any shares of our common stock (regardless of whether such stock is owned directly or indirectly, as such terms are used in the SEC rules promulgated under the Exchange Act) or from engaging in short sales of our common stock or otherwise entering into any other transaction or derivative agreement where he or she would earn a profit based on a decline of our stock price.

The following table sets forth the total stock ownership of our independent directors, including beneficially owned, unvested, and deferred shares, as calculated pursuant to our stock ownership guidelines as of February 22, 2019:

Director Resignation Policy

Our By-laws require a candidate in an uncontested election for director to receive a majority of the votes cast in order to be elected as a director. Under this provision, each vote is specifically counted “for” or “against”

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BOARD AND GOVERNANCE MATTERS

the director’s election, unless a common stockholder abstains from voting with respect to the matter. Thus, a director nominee is required to receive more votes “for” than “against” to be elected. Pursuant to Delaware law, a director shall remain in office until his or her successor is elected and qualified even if the director has not received a vote sufficient for re-election. Thus, a corporation could have a “holdover” director. However, pursuant to our Board-approved director resignation policy, an incumbent director must tender his or her resignation to the Board if the director is nominated but not re-elected. The policy also requires the Compensation Committee to make a recommendation to the full Board on whether to accept or reject the resignation within 90 days of receipt of the tendered resignation, and the full Board to make that determination. The Board would publicly disclose its decision by filing a Current Report on Form 8-K with the SEC within four days of making its determination.

Any director who tenders his or her resignation pursuant to this policy may not participate in the Compensation Committee recommendation or Board action regarding whether to accept the resignation offer. If each member of the Compensation Committee does not receive a vote sufficient for re-election, then the independent directors who did receive a sufficient vote shall appoint a committee amongst themselves to consider the resignation offers and recommend to the Board whether to accept them. If only three or fewer directors receive a sufficient vote for re-election, all directors (other than the director who tendered the resignation under review) may participate in the action regarding whether to accept the resignation offers.

Certain Transactions with Related Persons

Related Person Transaction Policies

Our Board has adopted a policy regarding the approval of any “related person transaction,” which is any transaction or series of transactions in which we or any of our subsidiaries is or are to be a participant, the amount involved exceeds $120,000, and a “related person” (as defined under SEC rules) has a direct or indirect material interest. Under the policy, a related person would need to promptly disclose to our Secretary any related person transaction and all material facts about the transaction. Our Secretary would then promptly assess and communicate that information to the Compensation Committee. Based on its consideration of all of the relevant facts and circumstances, the Compensation Committee will decide whether or not to approve such transaction and will generally approve only those transactions that do not create a conflict of interest. If we become aware of an existing related person transaction that has not been pre-approved under this policy, the transaction will be referred to the Compensation Committee, which will evaluate all options available, including ratification, revision, or termination of such transaction. Our policy requires any director who may be interested in a related person transaction to recuse himself or herself from any consideration of such related person transaction.

Our Code of Ethics, which is reviewed by our Board and provided to all of our directors, officers, and employees, requires that all such persons avoid any situations or relationships that involve actual or potential conflicts of interest, or perceived conflicts of interest, between an individual’s personal interests and the interests of AGNC. Pursuant to our Code of Ethics, each of these persons must disclose any conflicts of interest, or actions or relationships that might give rise to a conflict, to their supervisor or our chief compliance officer. If a conflict is determined to exist, the person must disengage from the conflict situation or terminate his or her provision of services to us. Our chief executive officer, president, chief financial officer, principal accounting officer, controller, directors and certain other persons who may be designated by our Board or its Audit Committee, whom we collectively refer to as our financial executives, must consult with our chief compliance officer with respect to any proposed actions or arrangements that are not clearly consistent with our Code of Ethics. In the

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BOARD AND GOVERNANCE MATTERS

event that a financial executive wishes to engage in a proposed action or arrangement that is not consistent with our Code of Ethics, the financial executive must obtain a waiver of the relevant provisions of our Code of Ethics in advance from our Audit Committee. We intend to post amendments to or waivers from the Code of Ethics (to the extent applicable to our financial executives) on our web site at www.AGNC.com.

Related Person Transactions

Following the Internalization, our subsidiary, MTGE Management, LLC served as the investment manager of MTGE Investment Corp. (“MTGE”) until October 7, 2018 pursuant to a management agreement. In 2018, we received $10.8 million in management fees in addition to reimbursements of certain expenses from MTGE. Pursuant to the termination of the management agreement with MTGE, MTGE Management, LLC also received a termination fee of $41.7 million. Prior to the termination of the MTGE management agreement, certain officers of AGNC also served as officers of MTGE. In addition, Mr. Kain served on the Board of MTGE until May 2, 2018. None of our officers received any form of compensation from MTGE for their service as officers, and Mr. Kain received no separate compensation for his service as a director of MTGE.

We have not entered into any other transactions in which any other related person of ours has any material interest.

Compensation Committee Interlocks and Insider Participation

No member of the Compensation Committee during fiscal year 2018 served as an officer, former officer, or employee of ours or had a relationship disclosable under “Board and Governance Matters—Certain Transactions with Related Persons.” Further, during 2018, none of our executive officers served as:

12    AGNC INVESTMENT CORP. – Proxy Statement

PROPOSAL 1: ELECTION OF DIRECTORS

PROPOSAL 1: ELECTION OF DIRECTORS

Pursuant to our Certificate of Incorporation, our common stockholders elect each of the members of the Board annually. The term of each director will expire at the Annual Meeting. Each director has been nominated by the Compensation Committee of the Board, in accordance with our By-laws, to stand for election at the Annual Meeting and to serve as a director until our Annual Meeting to be held in 2020 and until his or her successor is elected and qualified. It is expected that each of the nominees will be able to serve, but if any such nominee is unable to serve for any reason, the proxies reserve discretion to vote or refrain from voting for a substitute nominee or nominees. A common stockholder using the enclosed form of proxy can vote for or against any or all of the nominees or may abstain from voting for any or all of the nominees.

We believe that all of our nominees possess the personal and professional qualifications necessary to serve as a member of our Board and collectively represent a balance of industry knowledge, skills, and expertise. Our directors have been evaluated by the Compensation Committee pursuant to the guidelines described above under “Board and Governance Matters—Board Membership Criteria,” and the determination was made that each of them fulfills and exceeds the qualities that we look for in members of our Board. Mr. Kain is our Chief Executive Officer and Chief Investment Officer. All other nominees are independent as defined in the Nasdaq rules.

Summary of Our Board’s Industry and Functional Expertise

We believe that our Directors have a diversity of experience and a wide variety of skills and qualifications that strengthen their ability to provide guidance and oversight to the Company and management on behalf of stockholders.

AGNC INVESTMENT CORP. – Proxy Statement    13

PROPOSAL 1: ELECTION OF DIRECTORS

The information set forth below with respect to each of our directors, each of whom is a nominee for election at the Annual Meeting, is as of February 22, 2019. The business address of each nominee is c/o AGNC Investment Corp., 2 Bethesda Metro Center, 12^th Floor, Bethesda, Maryland 20814. We have highlighted specific attributes for each Board member below.

Director Nominee Biographies and Qualifications

DONNA J. BLANK, 57   Professional Experience: Ms. Blank is a finance executive with over 30 years of financial and operational experience, primarily in financial services. From 2015 through 2016, she was Chief Financial Officer at ZAIS Group, LLC, an alternative asset manager. While at ZAIS, Ms. Blank also served as the Chief Financial Officer of its externally managed publicly traded residential mortgage REIT and its public holding company. Prior to her role at ZAIS, she served as Chief Financial Officer and Executive Vice President at NFP Corp., a publicly traded insurance brokerage, from 2008 until 2013. From 2003 to 2008, Ms. Blank was Chief Financial Officer at Financial Guaranty Insurance Company, both before and subsequent to its sale by GE Capital to an investor group in late 2003. She currently serves as an Independent Director and member of the Audit Committee at American Enterprise Mutual Holding Company. Ms. Blank holds an MBA in Finance and a Master of International Affairs, both from Columbia University. Ms. Blank is an “audit committee financial expert” (as defined in Item 407 of Regulation S-K under the Securities Act).   Director Qualifications: Ms. Blank’s extensive public company accounting and operational experience in the financial services sector, including her senior executive role at a publicly traded residential mortgage REIT, strengthens our Board’s collective qualifications, skills, experience, and viewpoints.

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PROPOSAL 1: ELECTION OF DIRECTORS

MORRIS A. DAVIS, 47   Professional Experience: Dr. Davis is the Paul V. Profeta Chair of Real Estate and Academic Director of the Center for Real Estate at Rutgers Business School, where he has worked since September 2014. Previously, Dr. Davis was the James A. Graaskamp Chair of Real Estate in the Department of Real Estate at the University of Wisconsin-Madison, where he worked from September 2006 through August 2014. Dr. Davis was also the Academic Director of the James A. Graaskamp Center for Real Estate at the University of Wisconsin-Madison. He was previously on the Academic Advisory Council of the Federal Reserve Bank of Chicago and served as a Research Associate at the Federal Reserve Bank of Cleveland. From July 2002 to August 2006, Dr. Davis was an economist at the Federal Reserve Board working in the Flow of Funds Section. From October 2001 to July 2002, he was Director of Yield Optimization at Return Buy, Inc. and from August 1998 to October 2001, Dr. Davis was an economist at the Macroeconomics and Quantitative Studies Section of the Federal Reserve Board. Dr. Davis is widely published on issues related to the U.S. housing markets and a frequent lecturer. He holds a Ph.D. in Economics from the University of Pennsylvania. Dr. Davis also serves on the board of directors of SkyBridge Opportunity Zone Real Estate Investment Trust, Inc., a private REIT, where he is the chair of the valuation committee. He previously served on the board of directors of MTGE Investment Corp. (Nasdaq: MTGE) from August 2011 until May 2016.   Director Qualifications: Dr. Davis’s extensive expertise in economics, housing policy, and finance matters strengthens our Board’s collective qualifications, skills, experience, and viewpoints.

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PROPOSAL 1: ELECTION OF DIRECTORS

		LARRY K. HARVEY, 54     Professional Experience: Mr. Harvey is a recognized financial leader in the global real estate industry with over 20 years of experience in public company accounting and finance. Prior to his retirement, Mr. Harvey served as Chief Financial Officer of Playa Hotels & Resorts B.V. from April 2015 until July 2017. Prior to joining Playa, he served as Executive Vice President and Chief Financial Officer of Host Hotels & Resorts, Inc. (NYSE: HST) (“Host”) from 2007 to 2013 and served as its Treasurer from 2007 to 2010. From 2006 to 2007, Mr. Harvey served as Senior Vice President, Chief Accounting Officer of Host and from 2003 to 2006, he served as Host’s Senior Vice President and Corporate Controller. Prior to rejoining Host in 2003, he served as Chief Financial Officer of Barceló Crestline Corporation, formerly Crestline Capital Corporation. Prior to that, Mr. Harvey was Host’s Vice President of Corporate Accounting, before the spin-off of Crestline in 1998. Mr. Harvey previously served on the board of directors of American Capital Senior Floating, Ltd. (Nasdaq: ACSF) from 2013 to 2018 and on the board of directors of MTGE Investment Corp. (Nasdaq: MTGE) from 2011 until 2016. Mr. Harvey is an “audit committee financial expert” (as defined in Item 407 of Regulation S-K under the Securities Act).   Director Qualifications: Mr. Harvey’s public company accounting, finance, and risk management expertise, including his extensive experience as a senior executive of a REIT responsible for the preparation of financial statements, strengthens our Board’s collective qualifications, skills, experience, and viewpoints.

		PRUE B. LAROCCA, 67     Professional Experience: Ms. Larocca has served as our Chair and Lead Independent Director since May 2016. She is a retired investment banking executive and a widely recognized expert in the areas of housing finance and securitization. In addition, Ms. Larocca is a member of the board of the Housing Preservation Foundation and the Washington School for Girls and previously served two terms on the board of the American Securitization Trade Association. Ms. Larocca was a Managing Director of Royal Bank of Scotland (“RBS”) in the Mortgage Backed and Asset Backed Finance Group from 1997 until her retirement from RBS in 2011. Prior to joining RBS, Ms. Larocca was a Senior Vice President at Lehman Brothers in the mortgage finance business, managed the consumer and single-family securitization business for the Resolution Trust Corporation and practiced law with the firms of Milbank, Tweed, Hadley and McCloy and Kutak Rock. She is a graduate of the Georgetown University Law Center and Indiana University. Ms. Larocca previously served on the board of directors of MTGE Investment Corp. (Nasdaq: MTGE) from February 2013 until May 2016.   Director Qualifications: Ms. Larocca’s extensive and lengthy expertise in mortgage finance and asset securitization strengthens our Board’s collective qualifications, skills, experience, and viewpoints.

16    AGNC INVESTMENT CORP. – Proxy Statement

PROPOSAL 1: ELECTION OF DIRECTORS

		PAUL E. MULLINGS, 68     Professional Experience: Mr. Mullings has 40 years’ experience in the mortgage banking sector. Mr. Mullings currently serves as a Managing Director of The Collingwood Group, a business advisory and risk management firm focused on the financial services industry, a position he has held since 2015. From 2005 to 2015, Mr. Mullings served as a Senior Vice President of Freddie Mac in the Single-Family Business division. While at Freddie Mac, he also served on the Operating, Management and Credit Risk Committees. Prior to joining Freddie Mac, Mr. Mullings was a Senior Vice President at J.P. Morgan Chase & Co. from 1997 to 2005 in the home finance area. Previously, Mr. Mullings was the President and Chief Executive Officer of the Mortgage Electronic Registration Systems, Inc. (MERS) and the President and Chief Executive Officer of the Residential Mortgage Division of the First Interstate Bank in Los Angeles. Mr. Mullings received his Overseas Certificate in Business Studies from the College of Arts, Science and Technology in Kingston, Jamaica, following which he became a Member of The Institute of Accounting Staff in conjunction with the Association of Certified Accountants in London, England.   Director Qualifications: Mr. Mullings’ extensive senior executive officer experience in the mortgage banking sector and the secondary mortgage market strengthens our Board’s collective qualifications, skills, experience, and viewpoints.

		GARY D. KAIN, 53     Professional Experience: Mr. Kain has served as a Director and our Chief Executive Officer since March 2016 and Chief Investment Officer since January 2009. He previously was our President from April 2011 until March 2018.   Prior to joining AGNC Investment Corp., Mr. Kain was Senior Vice President of Investments and Capital Markets of Freddie Mac from May 2008 to January 2009. He also served as Senior Vice President of Mortgage Investments & Structuring of Freddie Mac from February 2005 to April 2008, during which time he was responsible for managing all of Freddie Mac’s mortgage investment activities for the company’s $700 billion retained portfolio. From 2001 to 2005, Mr. Kain served as Vice President of Mortgage Portfolio Strategy at Freddie Mac. From 1995 to 2001, he was the head trader in Freddie Mac’s Securities Sales & Trading Group, where he was responsible for managing all trading decisions including REMIC structuring and underwriting, hedging all mortgage positions, income generation, and risk management. Prior to that, he served as a senior trader, responsible for managing the adjustable-rate mortgage and REMIC sectors. Mr. Kain previously served as a Director and Chief Executive Officer of MTGE Investment Corp. (Nasdaq:MTGE) from March 2016 until May 2018 and as Chief Investment Officer from March 2011 until May 2018. In addition, he served as President from March 2011 until March 2018 of MTGE.   Director Qualifications: Mr. Kain’s extensive and lengthy expertise in the Agency mortgage sector and his deep knowledge of our business as our Chief Executive Officer and Chief Investment Officer strengthens our Board’s collective qualifications, skills, experience, and viewpoints.

AGNC INVESTMENT CORP. – Proxy Statement    17

PROPOSAL 1: ELECTION OF DIRECTORS

Conclusion and Recommendation; Vote Required

The election of directors nominated in Proposal 1 requires the affirmative vote of a majority of the votes cast by holders of our common stock at the Annual Meeting. The affirmative vote of a “majority” of the votes cast means that the number of votes cast “for” a director nominee must exceed the votes cast “against” that nominee. In the context of the election of six directors at the Annual Meeting, it will mean that each of the six candidates will be required to receive more votes “for” than “against” to be elected. Abstentions and broker non-votes will have no effect on the outcome of the proposal. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL THE NOMINEES NAMED ABOVE.

18    AGNC INVESTMENT CORP. – Proxy Statement

PROPOSAL 2: ADVISORY RESOLUTION ON EXECUTIVE COMPENSATION

PROPOSAL 2:

ADVISORY RESOLUTION ON EXECUTIVE COMPENSATION

General Information

As required by Section 14A of the Securities Exchange Act of 1934, we are asking for your advisory vote on the compensation paid to our named executive officers as disclosed in this proxy statement. Our Board has determined to hold this “say-on-pay” vote every year.

We urge you to review carefully our compensation policies and decisions regarding our named executive officers as presented in the “Compensation Discussion and Analysis,” the accompanying compensation tables, and the related narrative disclosures section appearing on pages 25 to 59. As described in detail in this proxy statement, we believe that our executive compensation program applies a pay-for-performance philosophy that effectively aligns the interests of our NEOs with those of our stockholders and allows us to attract, retain, and appropriately incent executives with the skills and experience necessary to achieve our key business objectives.

While the vote on this proposal is advisory in nature and not binding, the Board and the Compensation Committee will take the results of the vote into account in making future compensation decisions.

We are requesting our stockholders to approve, in a non-binding, advisory vote, the following resolution:

“RESOLVED, that the stockholders of the Company hereby approve the compensation paid to our named executive officers, as disclosed in the proxy statement for the 2019 Annual Meeting of Stockholders pursuant to the disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables, and related material disclosed in the proxy statement.”

Conclusion and Recommendation; Vote Required

The affirmative vote of a majority of all shares of common stock present or represented and entitled to vote at the Annual Meeting is required for advisory approval of this proposal. Abstentions and broker non-votes will have no effect on the outcome of the proposal. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE ADVISORY RESOLUTION ON EXECUTIVE COMPENSATION.

AGNC INVESTMENT CORP. – Proxy Statement    19

PROPOSAL 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANT

PROPOSAL 3:

RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANT

Ernst & Young LLP has served as our independent public accountant since our IPO and, at a meeting on February 20, 2019, the Audit Committee approved the appointment of Ernst & Young LLP to audit our financial statements for 2019. This appointment is subject to ratification or rejection by our common stockholders. A representative of Ernst & Young LLP is expected to be present at the Annual Meeting. The representative will have an opportunity to make a statement if he or she so desires and is expected to be available to respond to appropriate questions.

Independent Public Accountant’s Fees

Ernst & Young LLP performed various audit and other services for us during 2018 and 2017. Fees for professional services provided by Ernst & Young LLP in 2018 and 2017 in each of the following categories were:

Audit Fees

“Audit Fees” relate to fees and expenses billed by Ernst & Young LLP for the annual audit, including the audit of our financial statements, services required by statute and regulation, audit of internal control over financial reporting, review of our quarterly financial statements, and for comfort letters and consents related to stock issuances.

Tax Fees

“Tax Fees” relate to fees billed for professional services for tax compliance and consulting on tax-related matters.

Pre-Approval Policy

All services rendered by Ernst & Young LLP were permissible under applicable laws and regulations and were pre-approved by the Audit Committee for 2018 in accordance with its pre-approval policy. The Audit Committee has established a policy regarding the pre-approval of all audit and permissible non-audit services provided by our independent public accountant. The policy requires the Audit Committee to approve each audit or non-audit engagement or accounting project involving the independent public accountant, and the related fees, prior to commencement of the engagement or project to make certain that the provision of such services does not impair the firm’s independence. The committee may delegate its pre-approval authority to one or more of its members, and such member(s) are required to report any pre-approval decisions to the Audit Committee at its next meeting. The Audit Committee has delegated authority to its Chair to pre-approve the engagement and related fees of the independent public accountant for any additional audit or permissible non-audit services. In addition, pursuant to the policy, pre-approval is not required for additional non-audit services if such services result in a de minimus amount of less than 5% of the total annual fees paid by us to the independent public

20    AGNC INVESTMENT CORP. – Proxy Statement

PROPOSAL 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANT

accountant during the fiscal year in which the non-audit services are provided, were not recognized by us at the time of engagement to be non-audit services, and are reported to the Audit Committee promptly thereafter and approved prior to the completion of the annual audit.

Conclusion and Recommendation; Vote Required

The affirmative vote of the holders of a majority of all shares of our common stock present or represented and entitled to vote at the Annual Meeting is required to ratify the appointment of our independent public accountant. Abstentions will have no effect on the outcome of the proposal. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT PUBLIC ACCOUNTANT FOR 2019.

AGNC INVESTMENT CORP. – Proxy Statement    21

REPORT OF THE AUDIT COMMITTEE

REPORT OF THE AUDIT COMMITTEE

The Board of Directors has appointed an Audit Committee presently composed of five directors, Mss. Blank and Larocca, Dr. Davis, and Messrs. Harvey and Mullings. Each of the directors is independent as defined in the Nasdaq rules. The Board of Directors has determined that Ms. Blank and Mr. Harvey are each an “audit committee financial expert” (as defined in Item 407 of Regulation S-K under the Securities Act).

The Audit Committee’s responsibility is one of oversight as set forth in its charter, which is available in the Investors section of our website at www.AGNC.com. It is not the duty of the Audit Committee to prepare our financial statements, to plan or conduct audits, or to determine that our financial statements are complete and accurate and are in accordance with U.S. generally accepted accounting principles. Our management is responsible for preparing our financial statements and for maintaining internal controls. The independent auditors are responsible for auditing the financial statements and for expressing an opinion as to whether those audited financial statements fairly present our financial position, results of operations, and cash flows in conformity with U.S. generally accepted accounting principles.

The Audit Committee has reviewed and discussed our audited consolidated financial statements with management and with Ernst & Young LLP, our independent auditors for 2018.

The Audit Committee has discussed with Ernst & Young LLP the matters required to be discussed by Auditing Standard No. 16, as adopted by the Public Company Accounting Oversight Board.

The Audit Committee has received from Ernst & Young LLP the written statements required by Public Company Accounting Oversight Board Rule No. 3526, “Communications with Audit Committees Concerning Independence,” and has discussed Ernst & Young LLP’s independence with Ernst & Young LLP, and has considered the compatibility of non-audit services with the auditor’s independence.

Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements for the year ended December 31, 2018 be included in our annual report on Form 10-K for the year ended December 31, 2018, for filing with the Securities and Exchange Commission.

The Audit Committee has approved the appointment of Ernst & Young LLP to serve as our independent public accountants for the year ending December 31, 2019 and has directed that the appointment of Ernst & Young LLP be submitted to our stockholders for ratification.

By the Audit Committee:

Larry K. Harvey, Chair

Donna J. Blank

Morris A. Davis

Prue B. Larocca

Paul E. Mullings

Use of Report of the Audit Committee

In accordance with and to the extent permitted by applicable law or regulation, the information contained in the foregoing Report of the Audit Committee is not “soliciting material” and is not to be incorporated by reference into any future filing under the Securities Act or the Exchange Act.

22    AGNC INVESTMENT CORP. – Proxy Statement

EXECUTIVE OFFICERS

EXECUTIVE OFFICERS

Executive Officer Biographies

The Board generally elects officers annually following our annual meeting of stockholders to serve until the meeting of the Board following the next annual meeting. Set forth below is certain information about each executive officer as of February 22, 2019. The business address of each executive officer is c/o AGNC Investment Corp., 2 Bethesda Metro Center, 12^th Floor, Bethesda, Maryland 20814.

GARY D. KAIN, 53

Director, Chief Executive Officer and Chief Investment Officer

Mr. Kain has served as a Director and our Chief Executive Officer since March 2016 and Chief Investment Officer since January 2009. He previously served as our President from April 2011 until March 2018. Further information about Mr. Kain may be found under “Proposal 1: Election of Directors-Director Nominee Biographies and Qualifications” of this proxy statement.

PETER J. FEDERICO, 52

President and Chief Operating Officer

Mr. Federico has served as our President and Chief Operating Officer since March 2018. He was previously our Executive Vice President and Chief Financial Officer from July 2016 until March 2018 and Senior Vice President and Chief Risk Officer from June 2011 until our Internalization in July 2016.

Prior to joining AGNC Investment Corp., Mr. Federico served as Executive Vice President and Treasurer of Freddie Mac from October 2010 through May 2011, where he was primarily responsible for managing the company’s investment activities for its retained portfolio and developing, implementing and managing risk mitigation strategies. He was also responsible for managing Freddie Mac’s $1.2 trillion interest rate derivative portfolio and short- and long-term debt issuance programs. Mr. Federico also served in a number of other capacities at Freddie Mac, including as Senior Vice President, Asset & Liability Management, during his tenure with the company, which began in 1988.

CHRISTOPHER J. KUEHL, 45

Executive Vice President, Agency Portfolio Investments

Mr. Kuehl has served as our Executive Vice President since November 2016. He was previously a Senior Vice President from March 2012 through October 2016.

Prior to joining AGNC Investment Corp., Mr. Kuehl served as Vice President of Mortgage Investments & Structuring of Freddie Mac. In this capacity, Mr. Kuehl was responsible for directing Freddie Mac’s purchases, sales, and structuring activities for all MBS products, including fixed-rate mortgages, ARMs, and CMOs. Prior to joining Freddie Mac in 2000, Mr. Kuehl was a Portfolio Manager with TeleBank/Etrade Bank.

AGNC INVESTMENT CORP. – Proxy Statement    23

EXECUTIVE OFFICERS

BERNICE E. BELL, 47

Senior Vice President and Chief Financial Officer

Ms. Bell has served as our Senior Vice President since January 2016 and Chief Financial Officer since March 2018. Ms. Bell previously served as Chief Accounting Officer from January 2016 to March 2018, Vice President from April 2011 to January 2016, and as our Controller from 2008 through December 2015.

Prior to joining AGNC Investment Corp., Ms. Bell served as the Vice President and Controller of American Capital, Ltd. from July 2003 to December 2009. Prior to joining American Capital, Ms. Bell was the Vice President and Controller of certain privately-held companies engaged in the business of telecommunications and software development from July 1998 to June 2003 and was with the accounting firm Price Waterhouse, LLP from July 1994 to June 1998.

AARON J. PAS, 38

Senior Vice President, Non-Agency Portfolio Investments

Mr. Pas has served as our Senior Vice President since October 2016. He was previously a Senior Vice President of MTGE Investment Corp. (Nasdaq: MTGE) and its manager from January 2014 until September 2018 and was Vice President, Non-Agency Portfolio Management, of the manager of MTGE from March 2011 to January 2014.

Mr. Pas was previously the Director of Non-Agency Portfolio Management at Freddie Mac, where he was primarily responsible for managing the firm’s non-Agency residential securities portfolio. Mr. Pas is a CFA charterholder.

KENNETH L. POLLACK, 51

Senior Vice President, General Counsel, Chief Compliance Officer and Secretary

Mr. Pollack has served as our Senior Vice President, General Counsel, Secretary and Chief Compliance Officer since July 2016.

Prior to joining AGNC Investment Corp., Mr. Pollack was Senior Vice President and Deputy General Counsel of American Capital, Ltd. At American Capital, Mr. Pollack served as lead counsel for American Capital’s portfolio investment activities in the areas of Real Estate, U.S. Sponsor Finance, U.S. Buyouts, International Power, Special Situations, Operations and Financial Restructuring. Mr. Pollack joined American Capital in 2004. Prior to American Capital, Mr. Pollack was a member of the Corporate and Securities and Real Estate Practice Groups of Arnold & Porter.

24    AGNC INVESTMENT CORP. – Proxy Statement

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

2018 NEOs

Our NEOs for 2018 are:

Executive Summary

This Compensation Discussion and Analysis provides information on our executive compensation philosophy, objectives, and structure, and our process for setting compensation for our named executive officers, or NEOs. Information regarding our extensive stockholder outreach program and responsiveness to the 2018 advisory resolution on executive compensation is also included.

Business Overview

AGNC is an internally-managed REIT that invests predominantly in Agency residential mortgage-backed securities on a leveraged basis. We seek to provide investors with attractive risk-adjusted returns over a wide range of market scenarios through monthly dividends and tangible net asset value accretion, while maintaining the lowest operating cost structure among residential mortgage REITs. We generate income from the interest earned on our investment assets, net of associated borrowing and hedging costs, and net realized gains and losses on our investments and hedging activities. As such, our business operations are similar in nature to a levered fixed income investment fund.

AGNC INVESTMENT CORP. – Proxy Statement    25

EXECUTIVE COMPENSATION

AGNC combines a track-record of strong financial performance with the lowest cost operating structure in the residential mortgage REIT industry to generate and return value to our stockholders. We are committed to executing on our strategy through five key aspects of our business, which collectively constitute our strong value proposition for our stockholders:

26    AGNC INVESTMENT CORP. – Proxy Statement

EXECUTIVE COMPENSATION

Recent Performance

AGNC INVESTMENT CORP. – Proxy Statement    27

EXECUTIVE COMPENSATION

Compensation Philosophy and Objectives

Executive Compensation Program Objectives

Our executive compensation programs are designed to support a focus on key strategic and financial objectives including:

28    AGNC INVESTMENT CORP. – Proxy Statement

EXECUTIVE COMPENSATION

In support of these objectives, AGNC uses base salary, annual incentives, and long-term incentive awards. The following describes the compensation components for 2018. Certain modifications to weightings of components and performance elements were made for 2019 as described in detail within this Compensation Discussion and Analysis.

AGNC INVESTMENT CORP. – Proxy Statement    29

EXECUTIVE COMPENSATION

Stockholder Engagement and Response to 2018 Advisory Resolution on Executive Compensation

Following the results of our 2018 advisory resolution on executive compensation vote, our Board undertook a significant outreach effort to gather feedback from our stockholders on our executive compensation program. In the fall of 2018, we conducted broad outreach to stockholders holding 80% of our institutionally held common stock and comprising 53% of our outstanding common stock. We ultimately met with stockholders holding 48% of our institutionally held common stock and approximately 32% of outstanding common stock and with proxy advisory firms. Our Independent Chair Prue Larocca or our Compensation and Corporate Governance Committee Chair Morris Davis participated in the majority of these discussions. Through this outreach, investors provided feedback on aspects of our program that were viewed positively and retained, and we also discussed their questions and desired changes for certain aspects of our program, as summarized below.

What We Heard				How We Are Addressing
Desire for further clarification of peer construction process and challenges				Provided additional background in the proxy statement on the limited availability of comparable peers due to the prevalence of external management structures, lack of disclosure, relative size, and unique business model (see page 43)
Preference for a greater portion of CEO compensation to be allocated to long-term incentive compensation and, within that component, a greater portion in the form of performance-based incentive awards				Amended CEO’s employment agreement to reallocate $2.7 million of target compensation from salary and annual cash bonus to performance-based long-term incentive awards such that the majority of his total annual target compensation is now in the form of long-term incentives, two-thirds of which is performance-vesting (see page 48)
Request for a simplified scorecard				Further simplified metrics relative to 2018 scorecard (see page 40)
Increased disclosure regarding, and re-evaluation of, rigor of performance metrics				Performance measures evaluated annually. Enhanced the disclosure around the process for setting metrics and increased the rigor of certain performance metrics for 2019 with greater weight to financial performance (see page 36)
Desire to better understand AGNC’s business and industry				Provided enhanced disclosure in the proxy statement on our business overview, value proposition, and investment strategy (see page 25)

30    AGNC INVESTMENT CORP. – Proxy Statement

EXECUTIVE COMPENSATION

Compensation Program in Context

Until July 2016, AGNC was externally-managed by a wholly owned subsidiary of American Capital. The acquisition of our external manager strengthened our commitment to provide transparent disclosure and a strong stockholder focus, and our Board and management team continue to demonstrate this strength through detailed financial disclosure and strong governance and compensation practices.

Prior to our Internalization, as an externally-managed REIT, our Board and the Compensation Committee did not have control over the way NEOs were compensated or motivated, and CEO compensation was linked primarily to assets under management. As a result of the Internalization, the Compensation Committee has created a compensation program that aligns with AGNC’s financial and strategic objectives, promotes retention of the management team, emphasizes pay-for-performance, enhances alignment of NEOs with stockholders, and maintains a low operating expense structure. Our internal management structure puts us in a position to be more transparent with our stockholders on our executive compensation process, structure, and payouts. The following graphic shows the evolution of our compensation program since the Internalization.

Since our Internalization, the composition of our NEOs’ total target compensation has shifted significantly, with a greater emphasis on performance-based compensation and long-term equity. The following illustrates the shift in our CEO’s total compensation at target over this period.

AGNC INVESTMENT CORP. – Proxy Statement    31

EXECUTIVE COMPENSATION

Composition of Our CEO’s Total Compensation at Target

AGNC’s Compensation Program in the Context of our Broader Industry

The Bloomberg Mortgage REIT Index (BBREMTG) includes 20 residential mortgage REITs, which we refer to as the “Resi mREIT Universe.” We are the second largest residential mortgage REIT and the largest internally-managed residential mortgage REIT by market capitalization, total assets, and total equity.

Of the 20 REITs in the Resi mREIT Universe, only seven are internally-managed, meaning that the REIT is directly responsible for determining executive compensation. The remaining 13 REITs in the Resi mREIT Universe are externally managed by a third party and pay a third-party a management fee as a set percentage of equity in lieu of compensating employees directly. This management fee is used to pay the compensation and benefits for the manager’s executives and other employees, and compensation decisions regarding the manager’s executives are generally determined by the manager rather than the REIT’s board of directors. For these externally-managed REITs, the executive compensation arrangements are not fully disclosed or transparent to investors and are often not based on the REIT’s performance.

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EXECUTIVE COMPENSATION

The lack of publicly available compensation information due to the prevalence of external management structures makes it challenging to compare ourselves to other mortgage REIT peers from a compensation perspective. See page 43 for more details on the composition of our compensation comparator group.

Compensation Governance Practices

To support our compensation philosophy and objectives, we are committed to the following compensation governance practices.

What we do:

What we don’t do:

Compensation Program in Detail

Compensation Program Elements

The Compensation Committee believes it is important to compensate our NEOs in a manner that balances short- and long-term compensation and cash and equity-based compensation. Our NEOs’ compensation program includes three primary elements: base salary, short-term incentives in the form of an annual cash bonus, and long-term equity incentives, with a significant portion of incentive compensation subject to company performance and multi-year performance-based vesting for long-term equity awards.

The Compensation Committee’s philosophy on pay mix carries through the entire organization, with all AGNC employees receiving a portion of their compensation in the form of long-term incentives (“LTI”). The proportion of an individual’s target total direct compensation opportunity that is in the form of variable incentive-based elements versus fixed elements is directly correlated to the individual’s level of responsibility and role in

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the organization. Generally, higher level employees have higher proportions of incentive-based compensation in their target mix. Similarly, within the incentive-based elements, the proportion of LTI generally increases with the individual’s level of responsibility in the organization.

For 2018, 81% of average target compensation of our NEOs consisted of short-term and long-term incentive compensation, a 5% increase from 77% in 2017. For 2019, 85% of average target compensation of our NEOs consists of short- and long-term incentive compensation; 47% will be long-term incentives, and at least 50% of long-term incentives for each NEO will be tied to performance.

Base Salary

Base salary provides a fixed, baseline level of cash compensation to our NEOs and is a fixed expense for the Company. The Compensation Committee established base salaries for our NEOs considering a variety of factors, including:

The Compensation Committee reviews the base salaries for our NEOs annually and at the time of a promotion or other change in responsibilities, and salaries may be adjusted after considering the above factors.

At the time of the Internalization, Mr. Kain’s annual base salary was $4.4 million. The Compensation Committee and Mr. Kain recognized that the compensation arrangements set forth in his existing employment agreement would need to be adjusted following the Internalization to more closely align NEO compensation with the Company’s compensation philosophy and stockholder interests. Mr. Kain worked with the Compensation Committee following the Internalization to adjust his overall compensation package to phase in a reduction in his base salary to $1.8 million in 2018. In response to feedback received as part of our stockholder outreach efforts in 2018 and to further align his compensation with our pay for performance compensation philosophy, effective February 1, 2019, Mr. Kain has agreed to a further 50% reduction in his base salary to $900,000 per year. This reduction in base salary was then reallocated to his target performance-based long-term equity incentive awards. This represents an 80% cumulative reduction in Mr. Kain’s annual base salary since 2016.

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The annual base salaries, as set forth in the table below, are the minimum levels required in each executive’s respective employment arrangement. These levels were determined by the Compensation Committee, in consultation with FW Cook, taking into account salary history and the terms of the NEO’s employment in effect at the time of the Internalization, the highly complex and unique services provided by our NEOs, the desire to retain our NEOs during the period following our Internalization, the duties and responsibilities of the NEOs, and internal and external pay equity. Other than Mr. Kain’s reduction in base salary, the only other change to base salary in 2019 is a $50,000 increase for Ms. Bell in light of her increased responsibilities and performance following her appointment as our CFO effective March 31, 2018.

Annual Bonus

The Compensation Committee has established performance criteria for short-term incentives that directly correspond to the areas of greatest impact to our short- and long-term performance and operations, creating a direct connection between business success and our NEO’s compensation. Each NEO’s target for short-term incentive compensation, set forth in the table below for 2018 and 2019, is determined based on an evaluation of the same factors used in setting base salaries.

In response to feedback we received from investors in 2018 requesting that a larger percentage of CEO compensation be in the form of long-term incentive compensation, Mr. Kain’s annual bonus target in 2019 was reduced by $1.8 million, with such amount being reallocated to his target performance-based long-term incentive compensation. The Compensation Committee increased Ms. Bell’s annual bonus target for 2019 after considering her high level of performance following her assumption of the CFO role and the resulting increase in her responsibilities.

Corporate Scorecard for Calculating Incentive Compensation

The Compensation Committee uses a Corporate Scorecard to assist in its evaluation and awarding of an annual cash bonus. Under the Corporate Scorecard, actual payouts can range from 0% to 150% for each metric, with category and metric weights as assigned by the Compensation Committee, and payouts for performance

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between each measure are determined through linear interpolation. For 2018, the cash bonuses for Messrs. Kain and Federico were based solely on achievement of the scorecard measures. The other NEOs’ short-term cash incentives were based predominantly on the Corporate Scorecard measures and to a lesser extent on personal performance.

Our 2018 Corporate Scorecard is detailed in the table below and reflects revisions to increase rigor as compared to the 2017 Corporate Scorecard. In January 2018, the Compensation Committee set the levels for each metric based on an evaluation of historic performance over a five-year period and our forecast for 2018. The threshold and outperformance measures were determined based on a number of factors, including an evaluation of standard deviations from the target levels. The Compensation Committee’s analysis included back-testing the financial measures against performance in the prior five year period to evaluate on a hypothetical basis what payouts would have been under financial measures if applied in those periods. Compared to 2017, our 2018 Corporate Scorecard reflects more rigorous performance standards and, had it been applied over the prior five year period, would have resulted in an average annual payout of less than 100% of target.

Based on this evaluation, for 2018, the Committee increased the relative weighting of the financial measures from 60% in 2017 to 65% (with a corresponding decrease in operational and strategic metrics from 30% to 25%) and increased the threshold, target, and outperformance levels for our Relative Price-to-Tangible Book Ratio by 2.5% each. The operating expense measure also was made more rigorous relative to 2018 in light of 2017 results (our first full year following the Internalization) and anticipated operating expenses for 2018. However, the Committee did not change the absolute or relative economic return goals, as they were deemed appropriately challenging in light of the Company’s forecast for 2018 and historic analysis.

2018 Corporate Scorecard

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The 2018 Corporate Scorecard included both financial and operational/strategic metrics, as well as a metric for the management of MTGE, all of which corresponded to the core elements of our value proposition for stockholders. We believe these goals and measures effectively align NEO short-term incentives with financial, strategic, and operational performance of greatest import to our business.

2018 Corporate Scorecard Incentive Compensation Determination

Following a review of each of the three components of the 2018 Corporate Scorecard, the Compensation Committee calculated a total scorecard payout for 2018 of 103.3%. A more detailed discussion regarding each of the three elements included in the Corporate Scorecard is provided below.

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Financial Metric Results

Based on our 2018 Corporate Scorecard, a review of our 2018 financial performance indicated a 105.0% payout for the financial metric portion. AGNC exceeded the performance targets for relative economic return, relative price-to-tangible book ratio and net operating expense ratio. However, we underperformed on the absolute economic return metric, in part, as a result of increased interest rate volatility and widening Agency MBS spreads, largely during the fourth quarter.

2018 Operational and Strategic Review

2018 marked our second full year as an internally-managed REIT. In evaluating our performance under the operational and strategic objectives portion of the scorecard, the Compensation Committee considered the following domains:

The Committee noted the following achievements, among others, in determining that the Company had met target expectations on the operational and strategic objectives:

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These achievements were in addition to business operations that supported our timely and accurate financial reporting, risk management and compliance activities, and review of strategic opportunities. The Compensation Committee thus determined that these accomplishments merited a 100% payout for the operational and strategic portion of the Corporate Scorecard.

MTGE Manager Results

The Compensation Committee considered both MTGE’s financial performance under the Company’s management and the successful outcome of MTGE’s sale process in evaluating this component of the corporate scorecard. MTGE produced strong financial results during the first two quarters of 2018 under the Company’s management prior to the announcement of the acquisition and was ultimately acquired at a premium to its book value, producing an excellent outcome for stockholders of MTGE. Management devoted significant time and resources to facilitate a smooth sale process and closing, including during the due diligence period and the transfer of assets. Coincident with the closing of the MTGE sale, the Company also received a $41.7 million termination fee pursuant to its management contract. In light of MTGE’s strong financial performance and efforts of Company employees in facilitating the sale and closing of the MTGE transaction, the Compensation Committee determined that a 100% payout under the MTGE manager component of the scorecard was warranted.

Individual Bonus Decisions

Short-term incentives for Messrs. Kain and Federico in 2018 were based solely on achievement of the Corporate Scorecard measures. Based on the Compensation Committee’s assessment of the 2018 Corporate Scorecard, this resulted in a payout of 103.3% of target for Messrs. Kain and Federico.

Other NEOs’ short-term cash incentives were based predominantly on the Corporate Scorecard measures and to a lesser extent on an individual performance assessment. Mr. Kuehl was awarded a cash bonus at 102.6% of his target based on a relative weighting of the Corporate Scorecard at 80% and his personal performance at 20% (awarded at target). In evaluating his personal performance, the Compensation Committee considered the significant positive impact that his management of the Agency portfolio had on the Company’s overall performance in 2018, which is evident from the Company’s performance relative to the Agency REIT Peer Group. Ms. Bell and Messrs. Pas and Pollack each were awarded 102.0% of their target bonus, which reflects a relative weighting of the Corporate Scorecard at 60% and their individual personal performance at 40% (awarded at target). For Ms. Bell, the Compensation Committee considered her performance in her first year as our CFO and her ongoing and significant contributions in oversight of our accounting, tax, and treasury operations, financial planning, and reporting obligations. For Mr. Pas, the Compensation Committee considered his contributions in managing the Company’s growing investment portfolio of non-Agency securities, and for Mr. Pollack, the Compensation Committee reviewed his contributions to a number of our 2018 operational achievements, including our capital raising activities, increased stockholder engagement, the successful sale of MTGE and receipt of the $41.7 million termination fee pursuant to the MTGE management agreement, and his ongoing attention to improving our governance.

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These 2018 bonus payments are reflected in the following table:

2019 Corporate Scorecard

During our stockholder engagements in 2018, some investors commented on the complexity of our Corporate Scorecard and sought clarity around the rigor of the financial measures set. The Compensation Committee annually reviews the appropriateness of the Corporate Scorecard and has implemented further changes to the Company’s scorecard for 2019. As in 2018, the Compensation Committee set financial measures following its review of back-testing over a multi-year period and our forecast for 2019. As a result of these changes:

The following table illustrates structural changes to the scorecard:

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In addition, other changes to the scorecard for 2019 include:

Equity Incentive Compensation

The Compensation Committee believes that equity incentive compensation is an important component of our NEO compensation package and is critical in attracting, motivating, and retaining outstanding employees. Equity incentive compensation is intended to closely align our NEOs’ and other employees’ interests with our long-term success and promote long-term employee retention. Our long-term incentive program consisted of a combination of performance-based RSUs, time-vesting RSUs, and awards in the AGNC Mortgage Management, LLC Performance Incentive Plan—MTGE (the “MTGE PIP”). The allocation among performance-based RSUs, time-vesting RSUs, and MTGE PIP grants varied among each of our NEOs. We incorporated MTGE PIP awards into our compensation program in light of the importance of the management of MTGE to AGNC’s business at that time. The MTGE PIP, which was a small portion of the long-term incentive compensation paid to our NEOs, helped to facilitate the alignment of compensation for the Company’s personnel who were involved in the management of MTGE with MTGE’s actual performance. With the termination of the MTGE management contract in October 2018, MTGE PIP awards will no longer be made to AGNC NEOs.

The MTGE PIP shares granted to our NEOs in 2018 accounted for 6% of our total NEO compensation in 2018 and were also to vest over a three-year period. Grants of time-based RSU awards made in 2018 vest on a pro-rata basis annually over a three-year period. Following the closing of the sale of MTGE in September 2018, our Board determined that it would be appropriate to accelerate the vesting of the MTGE PIP shares for all employees, as the consideration received for the PIP awards following the MTGE acquisition no longer served to incent management and align their interests with stockholders. Officers of the Company who had previously elected to defer distribution of their PIP awards were granted Deferred Stock Unit awards in AGNC under the 2016 Plan in exchange for their deferred MTGE PIP awards, thereby further strengthening alignment with AGNC stockholders.

Performance-based RSUs are designed to reward creation of long-term economic returns for our stockholders both on an absolute and relative basis. To establish rigorous economic thresholds and motivate long-term performance, the awards vest at the end of a three-year performance period based 50% on our absolute

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economic return and 50% on our economic return relative to the economic returns of an unweighted average of the Agency REIT Peer Group each as compared to threshold, target, and outperformance levels established by the Compensation Committee (set forth in the following table). In establishing the metrics for relative economic return, the Compensation Committee evaluates historical returns for us and our peers.

Absolute and relative economic returns are calculated on a cumulative basis over the three-year vesting period. Achievement of these goals will be determined in the same manner, including the same peer group, as described above with respect to short-term incentive awards. For performance between the threshold, target, and outperformance measures, the number of shares vested will be determined through linear interpolation.

2018 Long-Term Incentive Awards

The 2018 long-term incentive awards made by the Compensation Committee were at each NEO’s target levels as were specified in their respective employment agreement or offer letter, as applicable, and are reflected in the following table:

The grant-date fair value of these awards is included in the Summary Compensation Table and Grants of Plan-Based Awards Table below. The ultimate value of the AGNC RSUs will depend on AGNC’s total stockholder return over the vesting period, and in the case of the performance-vested RSUs, AGNC’s absolute and relative economic return over the three-year performance period.

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2019 Long-Term Incentive Awards

As discussed above, to respond to stockholder feedback, the Compensation Committee evaluated the appropriateness of the pay mix of its NEOs, and we implemented the following changes for 2019:

Savings and Health and Welfare Benefits

Our executive officers participate in a broad-based 401(k) retirement savings plan generally applicable to all our employees, which includes an opportunity to receive employer matching contributions. We do not currently provide for pension plans, supplemental retirement plans, or deferred compensation plans (other than the ability to elect to defer payments of long-term incentive awards) for our executive officers. In addition, all of our executive officers also participate in medical, dental, vision, disability, life and long-term care insurance, and qualified transportation benefits that are provided generally to our employees.

Perquisites and Other Personal Benefits

We do not believe our executive officers should receive special perquisites and benefits and do not currently provide our executive officers with any perquisites or other personal benefits that are not available on a non-discriminatory basis to all employees.

Compensation Decision Process

Compensation Comparator Group

AGNC’s internal management structure, size and scale relative to residential mortgage REITs, and our Agency mortgage-backed securities investment focus are significant differentiators relative to other potential comparative public companies, and have made identifying a peer group for AGNC challenging.

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As a result, the Compensation Committee has not adopted a policy to benchmark compensation levels against comparative companies. However, the Compensation Committee, with the assistance of FW Cook, reviews compensation levels and practices at various financial services companies. In 2018, the Compensation Committee reviewed the compensation practices at 18 companies, including six internally-managed publicly-traded mortgage REITs and 12 publicly-traded asset management companies and non-bank financial services companies. The Compensation Committee determined the highly specialized and unique skill sets required of executives of these industries are most comparable to those required of AGNC’s NEOs, though none are an exact match for our Company.

Factors considered by the Compensation Committee in selecting companies for this analysis are outlined in the below table.

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For purposes of evaluating our performance and operations under our 2018 Corporate Scorecard, the Compensation Committee uses a subset of the Resi mREIT Universe, which we refer to herein as the “Agency REIT Peer Group.” These REITs are:

The Agency REIT Peer Group companies have portfolios and investment objectives that most closely resemble our own focus on Agency securities. Non-Agency REITs in the Resi mREIT Universe have more diverse portfolios and strategies that place a greater emphasis on credit-sensitive assets than our portfolio and those of our Agency REIT Peer Group. As such, these REITs would be expected to achieve divergent returns from our own Agency security-focused portfolio through various economic cycles and conditions. The Compensation Committee thus determined that our economic returns and trading price relative to book value are appropriately measured against a simple, unweighted average of the Agency REIT Peer Group for purposes of determining our relative performance. Only one of the five REITs in the Agency REIT Peer Group (Capstead Mortgage Corporation) was included in the group of companies whose executive compensation practices were reviewed by the Committee; the other companies are either significantly smaller than us or externally-managed and therefore do not disclose compensation of their executives.

The Compensation Committee continues to evaluate our peer construction in response to changes in market conditions and the REIT sector. In addition, CYS Investments was acquired in July 2018 by Two Harbors Investment Corp., which would have led to a reduction in the number of companies in the Agency REIT Peer Group. The Compensation Committee concluded that changes to the Agency REIT Peer Group to be used for relative performance measures were appropriate given recent merger activity in the sector, challenges in making meaningful comparisons if the peer group were to consist of only four companies, and the evolving business models of other REITs. The Compensation Committee has accordingly added other residential mortgage REITs having a meaningful concentration of Agency securities to the Agency REIT Peer Group to be used in setting relative measures in the 2019 Corporate Scorecard and performance-based long-term incentive awards. These additional companies are Two Harbors Investment Corp., Invesco Mortgage Capital Inc., and Dynex Capital, Inc.

Role of Compensation and Corporate Governance Committee

Our Compensation Committee, which is comprised of five independent directors, is responsible for establishing and overseeing our philosophy regarding executive compensation and makes all decisions relating to the compensation of our NEOs. The Compensation Committee is also responsible for ensuring that the total compensation offered to our executive officers is fair, competitive, and motivates high performance. The terms of any employment agreements with our NEOs and actions on compensation under the employment agreements are also under the primary direction of the Compensation Committee. Decisions related to CEO compensation are reviewed and approved by the Company’s independent directors based on the Compensation Committee’s evaluation of goals and objectives.

The Compensation Committee periodically reviews the Company’s compensation policies and programs and makes any modifications that the Committee deems necessary or advisable, subject to the terms of such

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policies or programs. The Compensation Committee annually reviews and approves the Company’s goals and objectives relevant to the compensation of the NEOs and other employees of the Company. Our Compensation Committee focuses on implementing an overall compensation program that emphasizes pay based on performance and alignment of interests with stockholders.

Role of Management

All compensation decisions related to our executive officers are at the discretion of the Compensation Committee or independent directors of our Board. The Compensation Committee considers the advice and counsel of the CEO when evaluating compensation of the other NEOs given his direct day-to-day working and supervisory relationship with those executives. Taking this feedback into consideration, the Compensation Committee engages in discussions and either determines the compensation of our NEOs or, with respect to the CEO or otherwise at its option, makes a final recommendation to the Board related to compensation paid to NEOs. Our CEO is not present and does not participate in the portions of meetings of the Compensation Committee or of the Board at which his performance is evaluated and his compensation is discussed and determined; only independent directors participate in such matters.

Role of the Independent Compensation Consultant

Under its charter, the Compensation Committee has the authority to select, retain, and terminate compensation consultants. The Compensation Committee has retained FW Cook to provide advice and counsel on executive compensation opportunities and program design and structure. Representatives of FW Cook attended certain meetings of the Compensation Committee, including meeting with members of the Compensation Committee without members of management present. FW Cook assisted the Compensation Committee in its analysis and evaluation of our initial executive compensation program, practices, and communications, and provided the Compensation Committee with market data and analysis of certain comparator companies who hire personnel and executives with similar skills and experience as our executive management team. FW Cook also provided assistance with our Corporate Scorecard, our long-term incentive awards, the setting of measures for performance-based incentive compensation, and other work that has informed executive compensation decisions.

Risk Assessment and Compensation

The Compensation Committee regularly monitors the risks and rewards associated with our compensation program. The Compensation Committee established our compensation program with the intent to align our interests with stockholders and prevent unnecessary or excessive risk-taking. We believe that our compensation policies and practices are well balanced and designed to avoid creating incentives that encourage unnecessary or excessive risks that could potentially have a material adverse effect on the Company. We use variable compensation for all of our NEOs, with a focus on performance. We have designed a compensation program with a mix of short- and long-term incentives to ensure management focuses on the long-term impact of short-term decisions and that management’s interests are aligned with stockholders. Compliance with the operational risk management guidelines designed to address excessive risk taking and approved by our Board is an integral part of the strategic and operational objectives of the Corporate Scorecard used for short-term incentive compensation decisions. The Compensation Committee continually assesses our executive compensation programs and has implemented additional policies and practices that we believe have further mitigated compensation driven risk, including the adoption of a clawback policy applicable to the period following the Internalization and senior executive officer stock ownership guidelines.

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Other Compensation Policies and Practices

Stock Ownership Guidelines

We strongly encourage all of our executive officers to hold a significant number of shares of Company common stock. We have adopted stock ownership guidelines for our most senior officers requiring them to own, within five years of adoption of the policy or becoming subject to the policy, a minimum number of shares of our common stock based on a multiple of base salary. The requirement is 6x for our CEO and Chief Investment Officer and 3x for our President and any Executive Vice President. Each is expected to retain at least 50% of the shares of common stock received upon vesting or earn-out of stock-based compensation, net of any shares withheld or sold to pay taxes on such income, until the foregoing ownership requirements are met. Shares of time-vested restricted stock units granted under the 2016 Plan (whether vested, unvested, or subject to a deferral election) are included in determining the number of shares held for this purpose, net of anticipated tax withholdings. Shares of unvested performance-based RSUs are not included for this purpose prior to completion of the applicable performance period. As of December 31, 2018, Mr. Kain held in excess of 12x, and Messrs. Federico and Kuehl each held in excess of 6x their respective 2018 base salary calculated in accordance with our guidelines.

The following table sets forth the total stock ownership of all our NEOs, including beneficially owned, unvested, and deferred shares, as calculated pursuant to our stock ownership guidelines as of February 22, 2019:

Anti-Hedging and Pledging Policy

Our Board has adopted a policy prohibiting our executive officers and directors from any hedging, pledging, or entering into margin loans with respect to any shares of our common stock or from engaging in short sales of our common stock or entering into any other transaction or derivative agreement where he or she would earn a profit based on a decline of our stock price. By way of example, transactions prohibited under the policy may include options, short sales, puts, calls, or derivative actions such as forwards, futures, or swaps.

Clawback Policy

We have adopted a clawback policy relating to recovery of certain excess performance-based compensation in the event of an accounting restatement by the Company due to material noncompliance with any financial reporting requirement under U.S. federal securities laws resulting at least in part from the willful fraud, dishonesty, or recklessness of one of the Company’s executive officers in the performance of his or her duties to the Company. Under this policy, the Company would be entitled to seek recovery of the portion of any performance-based compensation paid to our executive officers that would not have been earned had the Company’s restated financial statements been used in the determination of the amount of performance-based compensation originally awarded. This policy includes a three year look back period and applies to compensation paid to our executive officers following the Internalization.

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Employment Agreements

At the time of the Internalization, the Company inherited the employment agreements that Messrs. Kain, Federico, and Kuehl had in place with our external manager. The Compensation Committee, with the assistance of FW Cook, worked with each of these executives, who voluntarily agreed to negotiate new employment agreements that would shift the balance of their compensation from fixed elements to incentive compensation, thereby further aligning their interests with those of our stockholders on a short- and long-term basis. These new employment agreements, entered into in November 2016, secured the retention of these executives who had a track-record of strong performance. They also are intended to provide appropriate and balanced incentives toward achieving the annual and long-term strategic objectives set by the Compensation Committee and to create a stronger alignment of interests between our executives and our stockholders.

In connection with the renegotiation of his employment agreement in 2016, Mr. Kain voluntarily agreed to significant reductions to his base and target incentive compensation to be implemented over the 18-month period following the Internalization. Mr. Kain’s base compensation prior to the Internalization and pursuant to the terms of his prior employment contract was indexed to overall stockholders’ equity of the Company and MTGE such that issuances of new equity in either company could result in an increase in his base pay. Mr. Kain’s annual base salary for 2018 was reduced to $1.8 million, reflecting a reduction of approximately $2.6 million from his base salary of $4.4 million at the time of the Internalization. In 2018, 88% of Mr. Kain’s target total compensation was comprised of incentive compensation, and almost 70% of his total compensation was linked to performance.

During our stockholder engagement in 2018, a number of investors expressed a desire to see a greater percentage of CEO compensation be in the form of long-term incentive awards with a specific emphasis toward performance-based long-term incentive awards. The Compensation Committee and Mr. Kain carefully considered this feedback and mutually agreed to a number of changes to address this input. Thus, effective February 1, 2019, 56% of Mr. Kain’s target compensation will be in the form of long-term incentive awards, and 67% of his target level of long-term incentive awards will be performance-based awards vesting after completion of a three-year performance period. This shift in pay mix was accomplished through a 50% reduction in base salary to $900,000, a $1.8 million reduction of target bonus to $5.4 million and a corresponding $2.7 million increase in target performance-based long-term equity incentives.    

Mr. Kain’s revised employment agreement also provides that if his employment terminates after March 15, 2021 by reason of a voluntary termination as a result of retirement and pursuant to a succession plan approved by the Compensation Committee, Mr. Kain’s long-term time-based incentive awards that are outstanding at the time of his retirement would vest in full at such time. His performance-based incentive awards would vest on the same terms as though Mr. Kain had remained employed by the Company for the remainder of the vesting period applicable to such awards, provided that he continued to comply with certain covenants contained in the agreement. Vesting of any long-term incentive awards granted to Mr. Kain in the year of his retirement would apply only to a pro rata portion of the awards based on the number of full calendar months Mr. Kain was employed in such year.

The Compensation Committee reviews the compensation of our executive officers on an annual basis and will make adjustments when warranted by personal performance and internal and external pay equity. After evaluating the Company’s performance and recognizing the valuable contributions that each of the NEOs make to the Company, the Compensation Committee determined it was appropriate to have employment contracts in place with all of our NEOs.

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The following changes were made to promote the retention of Ms. Bell and Messrs. Pas and Pollack and further stockholder alignment by emphasizing performance-vested equity as a significant portion of long-term incentives and overall target compensation.

The employment agreements include certain severance payments and benefits if an NEO that is party to an employment agreement is terminated by the Company without “cause” or by the NEO for “good reason,” as each term is defined in each respective employment agreement and were the result of arms-length negotiations with these NEOs. The severance provisions included in the employment agreements related to a change of control include a “double trigger” requirement, which we determined was appropriate and in the best interest of our stockholders. See “Severance and Change of Control Payments” below. The employment agreements with these NEOs also include covenants related to post-employment obligations in areas such as competition with us, solicitation of our employees, and the confidentiality of certain information.

We completed the Internalization in part to reduce our overall cost of operations and to ensure the ongoing continuity of our business and relationship with our portfolio management team. As part of a retention bonus award granted in connection with the Internalization, Ms. Bell and Mr. Pas (each of whom was not an NEO of the Company at the time this award was granted) received a bonus of $159,375 and $398,438, respectively, on each of March 1, 2017 and March 1, 2018.

Tax Considerations

Section 162(m) of the Code generally prohibited any publicly held corporation from taking a federal income tax deduction for compensation in excess of $1 million in any taxable year to an executive officer who is named in the Summary Compensation Table. The Tax Cuts and Jobs Act, which was signed into law December 22, 2017, eliminated exceptions for performance-based compensation, among other things, subject to a special rule that “grandfathered” certain awards and arrangements in effect on or before November 2, 2017. In structuring our compensation programs, the Compensation Committee had considered this and other provisions; however, the Compensation Committee did not believe that it was necessarily in our best interests and the best interests of our stockholders for all compensation to meet the requirements of Section 162(m) for deductibility.

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Annual bonuses and awards made under the 2016 Plan and the MTGE PIP were not qualified performance awards under Section 162(m), as the Compensation Committee determined that it was appropriate to maintain flexibility that would prevent such compensation from qualifying as performance-based under Section 162(m). As a REIT, we are generally not subject to federal and state corporate income tax and therefore tax deductions are less valuable to us than to many other corporations. From and after January 1, 2018, compensation awarded in excess of $1 million to our NEOs generally will not be deductible. Although the Tax Cuts and Jobs Act limits the deductibility of compensation paid to the NEOs, the Committee will continue to retain flexibility to design compensation programs that are in the best long-term interests of the Company and our stockholders, with deductibility of compensation being one of a variety of considerations.

Report of the Compensation and Corporate Governance Committee

Our Compensation and Corporate Governance Committee reviewed and discussed with our management the “Compensation Discussion and Analysis” contained in this proxy statement. Based on that review and discussions, our Compensation and Corporate Governance Committee recommends to the Board of Directors that the “Compensation Discussion and Analysis” be included in this proxy statement.

By the Compensation and Corporate

Governance Committee:

Morris A. Davis, Chair

Donna J. Blank

Larry K. Harvey

Prue B. Larocca

Paul E. Mullings

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Summary Compensation Table

The following table provides information concerning the compensation of our NEOs earned during our fiscal years ended December 31, 2018 and 2017 and for the period from July 1, 2016 through December 31, 2016, except for Ms. Bell who was not an NEO in 2016 or 2017. Prior to the Internalization on July 1, 2016 and to the extent that our NEOs provided service to us, they were compensated by our former external manager and not directly by the Company.

In the column “Salary,” we disclose the amount of base salary paid to the NEO during the fiscal year. See “Employment Agreements” under “Compensation Discussion and Analysis,” above, for a description of the base salaries payable under each NEO’s employment agreement.

In the column “Bonus,” we disclose the amount of short-term cash incentive payments earned by the NEO during the fiscal year. See “Annual Cash Bonus” for a description of the annual scorecard for calculating the cash component of our incentive compensation awards for 2018 that were paid in 2019, and which are included in the Summary Compensation Table for 2018. In the column “Stock Awards,” we disclose awards of RSUs under the 2016 Plan, which includes both performance-based vesting and time-based vesting awards. The grant date fair value of the RSU awards assumes performance achievement at 100% of the target amount. Performance payouts may range from 0% to 200% of the target amount based on actual performance achieved. See “Equity Incentive Compensation” under “Compensation Discussion and Analysis,” above.

AGNC INVESTMENT CORP. – Proxy Statement    51

EXECUTIVE COMPENSATION

In the column “Non-Equity Incentive Plan Compensation,” we disclose the amount of the NEO’s awards under the MTGE PIP equal to the cash amount that we funded for the purchase of MTGE shares on the open market. See “Equity Incentive Compensation” under “Compensation Discussion and Analysis,” above. The amounts in the column “All Other Compensation” represent employer matches for employee contributions to our 401(k) plan. The NEOs did not have any perquisites or other personal benefits in excess of the reporting thresholds during the fiscal year.

52    AGNC INVESTMENT CORP. – Proxy Statement

EXECUTIVE COMPENSATION

Grants of Plan-Based Awards in Fiscal Year 2018

In the following table we provide information about each grant of an award made to an NEO during our fiscal year ended December 31, 2018 under the 2016 Plan for the AGNC awards and under the MTGE PIP for the MTGE awards. See “Equity Incentive Compensation” in “Compensation Discussion and Analysis” above for a description of the plans and awards. Amounts included in the “Estimated future payouts under non-equity incentive plan awards” are valued equal to the amount of cash we funded for the purchase of MTGE stock on the open market. Amounts included in the “Grant date fair value of stock awards” column are valued in accordance with ASC 718 without reduction of any assumed forfeitures.

AGNC INVESTMENT CORP. – Proxy Statement    53

EXECUTIVE COMPENSATION

Outstanding Equity Awards at Fiscal Year-End

In this table we provide information about stock awards under the 2016 Plan that have not vested and are outstanding as of December 31, 2018, for each NEO.

54    AGNC INVESTMENT CORP. – Proxy Statement

EXECUTIVE COMPENSATION