Company: MFAN
Filing Date: 2025-04-18
Form Type: DEF 14A
Source: 0001140361-25-014577
Chunk: 48

Company: MFA FINANCIAL, INC.
Filing Date: 2025-04-18
Form: DEF 14A
Chunk 48
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 ROAE Bonus was based on a methodology that makes use of the “Distributable earnings” measure of the Company’s operating performance. For purposes of determining the Distributable Earnings ROAE Bonus, the calculation of distributable earnings is determined using the same methodology used by the Company in reporting “Distributable earnings” in its quarterly financial results, but excludes the impact of certain realized gains (“Adjusted Distributable Earnings”). More specifically, for purposes of determining the 2024 Distributable Earnings ROAE Bonus, “Adjusted Distributable Earnings ROAE” was calculated by dividing (i) Adjusted Distributable Earnings by (ii) Adjusted Average Equity. Distributable earnings (as reported by the Company in its quarterly financial results) is determined by adjusting GAAP net income/(loss) by removing certain unrealized gains and losses, primarily on residential mortgage investments, associated debt, and hedges that are, in each case, accounted for at fair value through earnings, certain realized gains and losses, as well as certain

| MFA Financial, Inc. | 40 | 2025 Proxy Statement |

TABLE OF CONTENTS non-cash expenses and securitization-related transaction costs. The transaction costs are primarily comprised of costs only incurred at the time of execution of our securitizations and include costs such as underwriting fees, legal fees, diligence fees, bank fees and other similar transaction related expenses. As indicated above, for purposes of determining the Distributable Earnings ROAE Bonus, the calculation of Adjusted Distributable Earnings also excludes the impact of certain realized gains. Use of Adjusted GAAP ROAE and Adjusted Distributable Earnings ROAE. The Compensation Committee has, from time to time, reviewed the appropriateness of using return on common equity (or a measure derived therefrom) as a principal financial metric on which to evaluate Company performance and, in turn, on which to determine a portion of the annual bonuses for our CEO and certain other senior executives. The Compensation Committee believes that return on common equity is an appropriate measure to evaluate annual Company performance and to serve as the basis for determining Mr. Knutson’s and Mr. Wulfsohn’s annual bonus (but with the adjustments to the calculation of such measure as described above). As a company whose primary source of earnings is income from the performance of investments in mortgage-related assets, the Compensation Committee believes that return on common equity generally provides an appropriate measurement of our financial performance and is reflective of how effectively we select our investments, manage our