UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

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MFA Financial, Inc.

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General Information			1
Annual Report			2
Voting Information			2
Corporate Governance			43
Board and Committee Matters			98
Report of the Audit Committee			109
Compensation of Non-Employee Directors			1211
Election of Directors			1514
Ratification of Appointment of Independent Registered Public Accounting Firm			1918
Management			2120
Executive Compensation			23
Compensation Discussion and Analysis			23
Report of the Compensation Committee			3943
Summary Compensation Table			3944
Grant of Plan-Based Awards			45
Outstanding Equity Awards			47
Options Exercised and Stock Vested			49
Employment Contracts			49
Potential Payments Upon Termination of Employment or Change in Control			53
Securities Authorized for Issuance under Equity Compensation Plans			57
Advisory (Non-Binding) Resolution to Approve Executive Compensation			5657
Proposal to Amend Charter to Eliminate ClassificationApproval of the Board of DirectorsMFA Financial, Inc. Equity Compensation Plan			5758
Section 16(a) Beneficial Ownership Reporting Compliance			5871
Certain Relationships and Related Transactions			5871
Security Ownership of Certain Beneficial Owners and Management			5972
Other Matters			6074
Submission of Stockholder Proposals			6174
Householding of Proxy Materials			6174
Miscellaneous			6275
Appendix A: MFA Financial, Inc. Equity Compensation Plan			A-1

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The following table summarizes the compensation of our Non-Employee Directors for the year ended December 31, 2013. (Richard J. Byrne, who was appointed as a director on March 3, 2014.

2014 received no compensation from us during 2013.)

Non-Employee Director Compensation

Name		Fees Earned or Paid in Cash ($)(1)				Stock Awards ($)(2)				Option Awards ($)(3)				Total ($)(4)				Fees Earned or Paid in Cash ($)(1)				Stock Awards ($)(2)				Total ($)(3)
Stephen R. Blank		$	142,000			$	75,003			$	0			$	217,003				140,000				100,005				240,005
James A. Brodsky			111,000				75,003				0				186,003				114,000				100,005				214,005
Michael L. Dahir			119,500				75,003				0				194,503
Richard J. Byrne(4)																			97,000				100,005				197,005
Michael L. Dahir(5)																			116,500				75,006				191,506
Laurie Goodman(6)																			57,500				93,750				151,250
Alan L. Gosule			111,000				75,003				0				186,003				112,500				100,005				212,505
Robin Josephs			137,000				75,003				0				212,003				139,000				100,005				239,005
George H. Krauss			97,500				143,553				0				241,053				98,750				185,131				283,881

Name		Number of Unexercised NQSOs
Stephen R. Blank			-0-
James A. Brodsky			-0-
Michael L. Dahir			-0-
Alan L. Gosule			5,000
Robin Josephs			-0-
George H. Krauss			-0-

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Non-employee directors are also eligible to receive other grants of NQSOs, Restricted Shares,Common Stock and phantom shares and DERs under the 2010 Equity Compensation Plan. We also reimburse all Non-Employee Directors for reasonable travel and other expenses incurred in connection with attending Board, committee and stockholder meetings and other Company-sponsored events and/or other activities in which they engage or participate on our behalf. In addition, we provide all non-employee directors with up to $500,000 of accidental death and dismemberment insurance while traveling to or attending Board, committee and stockholder meetings and other Company-sponsored events. Directors who are employees of the Company (presently, only Mr. Gorin) are not entitled to receive additional compensation for serving on the Board.

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1. ELECTION OF DIRECTORS

Board of Directors

In accordance with our Charter and Bylaws, the Board is currently comprised of eight directors, Stephen R. Blank, James A. Brodsky, Richard J. Byrne, Michael L. Dahir,Laurie Goodman, William S. Gorin, Alan L. Gosule, Robin Josephs and George H. Krauss, and it is divided into three classes, with Messrs.Mr. Blank, Mr. Gorin and GorinMs. Goodman constituting the Class I directors, Messrs. Dahir andMr. Krauss and Ms. Josephs constituting the Class II directors and Messrs. Brodsky, Byrne and Gosule constituting the Class III directors.

One class of directors is elected at each annual meeting of our stockholders for a term of three years. Each director holds office until his or her successor has been duly elected and qualified or the director’s earlier resignation, death or removal. The term of the Board’s Class III directors expires at the Annual Meeting. The terms of the other two classes of directors expire at MFA’s 2015 Annual Meeting2016 annual meeting of Stockholdersstockholders (Class IIIII directors) and MFA’s 2016 Annual Meeting2017 annual meeting of Stockholdersstockholders (Class IIII directors).

Upon the recommendation of the Nominating and Corporate Governance Committee of the Board, Mr. BlankKrauss and Mr. GorinMs. Josephs have been nominated by the Board to stand for re-election as Class III directors by the stockholders at the Annual Meeting to serve until our 2017 Annual Meeting2018 annual meeting of Stockholdersstockholders and until their respective successors are duly elected and qualify. In the event that the proposed amendment to MFA’s Charter to eliminate the classification of the Board (see page 57) is adopted, the terms of the Class I directors will expire at the Annual Meeting of Stockholders to be held in 2015.

If the candidacy of Mr. BlankKrauss or Mr. GorinMs. Josephs should, for any reason, be withdrawn prior to the Annual Meeting, the proxies will be voted by the proxy holders in favor of such substituted candidate or candidates (if any) as shall be nominated by the Board.

The Board has no reason to believe that, if re-elected, Mr. BlankKrauss and Mr. Gorin willMs. Josephs would be unable or unwilling to serve as Class III directors.

The Board has determined that all of our current directors are qualified to serve as directors of the Company. The biographies of each of the Board’s nominees standing for re-election and our continuing directors set forth below contain information regarding each person’s service as a director, business experience and education, director positions held currently or at any time during the last five years, information regarding certain legal or administrative proceedings, if applicable, and the experiences, qualifications, attributes or skills that caused the Board and itsthe Nominating and Corporate Governance Committee to determine that the person should serve as a director.

In addition to the specific information set forth in their respective biographies, we believe that each of our directors also possesses the tangible and intangible attributes and skills that we believe are necessaryimportant to bebeing an effective director on the Board, including experience at senior levels in areas of expertise relevant and beneficial to our business and industry, a willingness and commitment to assume the responsibilities required of a director of the Company and the character and integrity we expect of directors of the Company.

Nominees for Re-Election as Class III Directors

The following information is furnished regarding the nominees for re-election as Class III directors by the holders of Common Stock.

Stephen R. Blank, 68, has served as a director of MFA since 2002. Since 1998, Mr. Blank has been a Senior Resident Fellow, Finance, at the Urban Land Institute (“ULI”), a non-profit education and research institute which studies land use and real estate development policy. Prior to joining ULI, Mr. Blank served from 1993 to 1998 as Managing Director — Real Estate Investment Banking of CIBC Oppenheimer Corp. From 1989 to 1993, Mr. Blank was Managing Director of the Real Estate Corporate Finance Department of Cushman & Wakefield, Inc. From 1979 to 1989, Mr. Blank served as Managing Director — Real Estate Investment Banking of Kidder, Peabody & Co. From 1973 to 1979, Mr. Blank was employed by Bache & Co., Incorporated, as Vice President, Direct Investment Group. Mr. Blank currently

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We believe that Ms. Josephs’ qualifications to serve on the Board include her significant knowledge of the specialty finance and real estate industries, her extensive experience in the investment banking industry, including her expertise in public and private real estate finance and equity capital markets, her substantial service on the boards and committees of other public and private companies, her experience with corporate governance, finance and other related matters.

George H. Krauss, 72,73, has served as a director of MFA since 1997. Mr. Krauss was named a Managing Director of The Burlington Capital Group LLC (“Burlington”) in 2010 and, prior thereto, had been a consultant to Burlington since 1997. From 1972 to 1997, Mr. Krauss practiced law with Kutak Rock LLP, serving as such firm’s managing partner from 1983 to 1993 and, from 1997 to 2006, was Of Counsel to such firm. Mr. Krauss currently serves as a member of the board of managers of Burlington, which is the general partner of America First Tax Exempt Investors, LP. Mr. Krauss was a member of the boards of directors of Gateway, Inc., from 1991 to October 2007, West Corporation, from January 2001 to October 2006, America First Apartment Investors, Inc., from January 2003 to September 2007, andinfoGROUP, Inc., from December 2007 to July 2010. Mr. Krauss received a Juris Doctorate degreeJ.D. and a MastersMaster of Business Administration degree from the University of Nebraska.

We believe that Mr. Krauss’ qualifications to serve on the Board include his significant experience as a managing partner of a major law firm, his substantial service on the boards and committees of other public and private companies, his considerable legal and business experience in corporate, mergers and acquisitions and regulatory matters and his significant exposure to our business and industry through his lengthyears of service on the Board.

THE BOARD RECOMMENDS A VOTE “FOR” THE RE-ELECTION OF MR. KRAUSS AND MS. JOSEPHS AS CLASS II DIRECTORS.

Continuing Class I Directors

The following information is furnished regarding our Class I directors (who will continue to serve on the Board until our 2017 Annual Meeting of Stockholders and until their respective successors are duly elected and qualify).

Stephen R. Blank, 69, has served as a director of MFA since 2002. From 1998 to 2014, Mr. Blank was a Senior Resident Fellow, Finance, at the Urban Land Institute (“ULI”), a non-profit education and research institute which studies land use and real estate development policy. Prior to joining ULI, Mr. Blank served from 1993 to 1998 as Managing Director — Real Estate Investment Banking of CIBC Oppenheimer Corp. From 1989 to 1993, Mr. Blank was Managing Director of the Real Estate Corporate Finance Department of Cushman & Wakefield, Inc. From 1979 to 1989, Mr. Blank served as Managing Director — Real Estate Investment Banking of Kidder, Peabody & Co. From 1973 to 1979, Mr. Blank was employed by Bache & Co., Incorporated, as Vice President, Direct Investment Group. Mr. Blank currently serves as a member of the board of directors of Home Properties, Inc., where he is chair of the audit committee and a member of the nominating and governance committee, and as Chair of the board of trustees of Ramco-Gershenson Properties Trust, where he is a member of the compensation committee. From May 1999 to February 2007, Mr. Blank was a member of the board of directors of BNP Residential Trust, Inc. Mr. Blank is a graduate of Syracuse University and received a Master of Business Administration degree in Finance from Adelphi University.

We believe that Mr. Blank’s qualifications to serve on the Board include his extensive knowledge of the real estate industry as evidenced by his former position at ULI, his experience in the investment banking industry, including his expertise in public and private real estate finance, his substantial service on the boards and committees of other public and private companies and his regular attendance of director continuing education programs.

Laurie Goodman, 59, has served as a director of MFA since July 2014. She is presently the Center Director of the Housing Finance Policy Center at the Urban Institute, a Washington, D.C.-based nonprofit organization dedicated to elevating the debate on social and economic policy. Ms. Goodman joined the Urban Institute in late 2013 from Amherst Securities Group, L.P., a boutique broker dealer specializing in

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securitized products, where she had been a Senior Managing Director since late 2008 leading a group known for its analysis of housing policy issues. Prior to her tenure at Amherst Securities, Ms. Goodman was head of Global Fixed Income Research and Manager of U.S. Securitized Products Research at UBS and its predecessor firms from July 1993 through November 2008. Prior to her tenure with UBS, Ms. Goodman spent ten years in senior fixed income research positions at Citicorp, Goldman Sachs, and Merrill Lynch. She was also a mortgage portfolio manager and a Senior Economist at the Federal Reserve Bank of New York. Ms. Goodman has a B.A. in mathematics from the University of Pennsylvania and a M.A. and Ph.D. in economics from Stanford University. She has published more than 200 articles in professional and academic journals and co-authored and co-edited five books. Ms. Goodman was inducted into the Fixed Income Analysts Hall of Fame in 2009.

We believe that Mr. Goodman’s qualifications to serve on the Board include her extensive knowledge of mortgage finance, housing policy issues, the fixed income capital markets and, in particular, the mortgage-backed securities markets.

William S. Gorin, 56, has served as a director of MFA since 2010 and has been Chief Executive Officer of MFA since January 1, 2014. From 2008 to 2013, he served as our President. From 1997 to 2008, he served as our Executive Vice President and, from 2001 to September 2010, as our Chief Financial Officer. During his tenure with MFA, he has also served as our Treasurer and our Secretary. From 1989 to 1997, he held various positions with PaineWebber Incorporated/Kidder, Peabody & Co. Incorporated, serving as a First Vice President in the Research Department. Prior to that position, Mr. Gorin was Senior Vice President in the Special Products Group. From 1982 to 1988, Mr. Gorin was employed by Shearson Lehman Hutton, Inc./E.F. Hutton & Company Inc. in various positions in corporate finance and direct investments. Mr. Gorin is a graduate of Brandeis University and received a Master of Business Administration degree from Stanford University.

We believe that Mr. Gorin’s qualifications to serve on the Board include his position as our President, his extensive knowledge of mortgage-backed securities and capital markets, his substantial knowledge of our business operations and investment strategies and his overall experience in the investment banking industry, including his expertise in corporate finance.

Continuing Class III Directors

The following information is furnished regarding our Class III directors (who will continue to serve on the Board until our 2016 Annual Meeting of Stockholders and until their respective successors are duly elected and qualify).

James A. Brodsky, 68,69, has served as a director of MFA since 2004. Mr. Brodsky is a partner in, and a founding member of, the law firm of Weiner Brodsky Kider PC in Washington, D.C., and has practiced law with that firm and its predecessor since 1977. Mr. Brodsky provides legal advice and business counsel to publicly-traded and privately-held national and regional residential mortgage lenders on secondary mortgage market transactions (including those involving Fannie Mae, Freddie Mac and Ginnie Mae), mergers and acquisitions, asset purchases and sales, mortgage compliance issues and strategic business initiatives. Prior to 1977, Mr. Brodsky was a Deputy Assistant Secretary with the U.S. Department of Housing and Urban Development. He also currently serves as General Counsel of the National Reverse Mortgage Lenders Association. Mr. Brodsky also is a director of the Community Preservation and Development Corporation, a not-for-profit real estate developer of multiple affordable housing communities in the mid-Atlantic region, where he serves as a member of its governance and real estate development committees. Mr. Brodsky is also a former Chairman of the Board of each of the Montgomery County Maryland Housing Opportunities Commission and the Montgomery Housing Partnership. Mr. Brodsky is a graduate of Cornell University and received a Juris Doctor degreeJ.D. from Georgetown University Law Center and a MastersMaster of Science in Electrical Engineering from Columbia University.

We believe that Mr. Brodsky’s qualifications to serve on the Board include his significant experience as a lawyer and founding member of a national law firm specializing in residential mortgage finance, his extensive knowledge of the origination and servicing of, and the regulatory aspects relating to, residential

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mortgage loans, his experience with the federal executive branch agencies that regulate and directly affect the residential mortgage sector and his general experience with corporate governance, finance and other related matters.

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2. RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

On March 4, 2014,2015, the Audit Committee of the Board appointed KPMG LLP as our independent registered public accounting firm for the year ending December 31, 2014.2015.

The Board is asking stockholders to ratify the Audit Committee’s appointment of KPMG LLP for 2014.2015. In the event that stockholders fail to ratify the appointment, the Audit Committee will consider it a direction to consider other accounting firms for the subsequent year. Even if the selection is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in our best interests.

KPMG LLP first audited our financial statements beginning with the year ended December 31, 2011. The Audit Committee appointed KPMG LLP as our independent registered public accounting firm on May 27, 2011, upon its dismissal of Ernst & Young LLP, which had served as the Company’s independent auditors since 2003.

One or more representatives of KPMG LLP are expected to be present at the Annual Meeting and will be provided with an opportunity to make a statement if so desired and to respond to appropriate inquiries from stockholders.

Independent Registered Public Accounting Firm Fees

The following table summarizes the aggregate fees (including related expenses) billed to us for professional services provided by KPMG LLP and Ernst & Young LLP in respect of the fiscal years ended December 31, 20132014 and 2012.2013.

		Fiscal Year Ended December 31,								Fiscal Year Ended December 31,
		2013				2012				2014				2013
Audit Fees(1)		$	811,000			$	1,055,500			$	947,635			$	811,000
Audit-Related Fees(2)			—				—				—				—
Tax Fees(3)			117,867				44,400				52,030				117,867
All Other Fees(4)			1,796				1,796				1,650				1,796
Total		$	930,663			$	1,101,696			$	1,001,315			$	930,663

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All audit tax and other services provided to us were reviewed and pre-approved by the Audit Committee, which concluded that the provision of such services by KPMG LLP was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions.

THE BOARD RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2014.2015.

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MANAGEMENT

The following table sets forth certain information with respect to each of our executive officers at December 31, 2013.2014. The Board appoints or annually reaffirms the appointment of all of our executive officers:

Officer		Age		Position Held
William S. Gorin		5556		Chief Executive Officer and Director
Craig L. Knutson		5455		President and Chief Operating Officer
Ronald A. Freydberg		5354		Executive Vice President
Stephen D. Yarad		4445		Chief Financial Officer
Elwin Ford		5253		Senior Vice President
Kathleen A. Hanrahan		4849		Senior Vice President and Chief Accounting Officer
Peter G. Kollydas		50		Senior Vice President
Gudmundur Kristjansson		3435		Senior Vice President
Terence B. Meyers		5960		Senior Vice President — Tax
Matthew Ottinger		5657		Senior Vice President and Controller
Harold E. Schwartz		4950		Senior Vice President, General Counsel and Secretary
Shira E. Siry		3941		Senior Vice President and Assistant Secretary
Bryan Wulfsohn		31		Senior Vice President
Sunil Yadav		4345		Senior Vice President

Biographical information on Mr. Gorin is provided in “Election of Directors” of this Proxy Statement.

Craig L. Knutsonserves as our President and Chief Operating Officer, the positions to which he was elected effective January 1, 2014. Mr. Knutson served as our Executive Vice President from 2008 to 2013. From 2004 to 2007, Mr. Knutson served as Senior Executive Vice President of CBA Commercial, LLC, an acquirer and securitizer of small balance commercial mortgages. From 2001 to 2004, Mr. Knutson served as President and Chief Operating Officer of ARIASYS Inc., a software development company specializing in custom solutions for small to midsize businesses. From 1986 to 1999, Mr. Knutson held various progressive positions in the mortgage trading and mortgage finance departments of First Boston Corporation (later Credit Suisse), Smith Barney and Morgan Stanley. From 1981 to 1984, Mr. Knutson served as an Analyst and then Associate in the Investment Banking Department of E.F. Hutton & Company Inc. Mr. Knutson holds a MastersMaster of Business Administration degree from Harvard University and a Bachelor of Arts degree (magna cum laude) in Economics and French from Hamilton College.

Ronald A. Freydbergserves as our Executive Vice President. Mr. Freydberg joined MFA Financial, Inc. in 1997. From 1995 to 1997, Mr. Freydberg served as a Vice President of Pentalpha Capital, in Greenwich, Connecticut, where he was a fixed-income quantitative analysis and structuring specialist. From 1988 to 1995, Mr. Freydberg held various positions with J.P. Morgan & Co. From 1994 to 1995, he was in J.P. Morgan’s Global Markets Group, where he was involved in commercial mortgage-backed securitization and sale of distressed commercial real estate, including structuring, due diligence and marketing. From 1985 to 1988, Mr. Freydberg was employed by Citicorp. Mr. Freydberg holds a MastersMaster of Business Administration degree in Finance from George Washington University and a Bachelor of Arts degree from Muhlenberg College.

Stephen D. Yaradserves as our Chief Financial Officer. Mr. Yarad joined MFA Financial, Inc. in 2010. Prior to joining MFA, Mr. Yarad was a partner in the financial services audit practice of KPMG LLP, having been admitted to the partnership of the firm in 2005. He commenced his career with KPMG LLP in Australia in 1991 and held various progressive positions before relocating to the United States at the end of 2001. In addition to being a Chartered Accountant and Associate Member of the Institute of Chartered Accountants in Australia, he is also a Certified Public Accountant licensed in New York and New Jersey. Mr. Yarad

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holds a Bachelor of Commerce (Accounting and Finance) with merit from the University of New South Wales (Sydney, Australia) and a Graduate Diploma in Applied Finance and Investment from the Securities Institute of Australia.

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HaroldHarold E. Schwartzserves as our Senior Vice President, General Counsel and Secretary. Mr. Schwartz joined MFA Financial, Inc. in August 2011. From 2001 to July 2011, Mr. Schwartz served as a Vice President and Senior Counsel for American Express Company, where he specialized in corporate, securities, corporate governance and mergers and acquisitions matters. From 1996 to 2000, Mr. Schwartz served as Senior Vice President, General Counsel and Secretary of Caribiner International, Inc., a business communications services and audio visual equipment rental company. Mr. Schwartz began his career working for the law firm of Schulte Roth & Zabel LLP, where he was an associate in the firm’s corporate department from 1989 to 1996.department. Mr. Schwartz has a J.D. from Georgetown University and an A.B. from Duke University.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis (“CD&A”)

Introduction

The following section discusses the key features of our executive compensation program and the approach taken by the Compensation Committee of the Board in setting and determining compensation for 20132014 for:

The Compensation Committee oversees the design and administration of our compensation programs and makes decisions relating to the compensation of our Named Executive Officers. The Compensation Committee intends that the compensation paid to the Named Executive Officers be consistent with our overall compensation philosophy and competitive with market practices.

2013 PerformanceThe sections that follow describe:

Summary

It is the Compensation Committee’s role to review the Company’s executive compensation plans and programs and, after taking into account the outcome of the most recent stockholder advisory vote on executive compensation, makes compensation decisions it believes are appropriate. Among other things, below is a summary of certain of the determinations made by the Compensation Committee Actions

In 2013, under the direction ofwith respect to 2014 compensation matters, and in particular with respect to Mr. Gorin and Mr. Knutson, our two most senior management, MFA continued to successfully execute its investment strategy. Through its investment in both Agency and Non-Agency residential mortgage-backed securities (“MBS”), MFA delivered stockholder value from the generation of distributable incomehighly-compensated employees. These items are discussed further within this CD&A and from asset performance linked to improvement in residential mortgage credit fundamentals.

In an investment environment characterized by very low short-term rates, variable prepayment speeds and a pronounced mid-year financial market reaction to anticipated tapering of the Federal Reserve’s quantitative easing program, MFA’s metrics remained both attractive and consistent throughout the year. Metrics such as yield on interest earning assets (ranging from a low of 4.01% in the second quarterexecutive compensation tables and notes to the tables and other narratives regarding compensation matters, all of the year to a high of 4.26% in the fourth quarter), net interest rate spread (ranging from a low of 2.24% in the third quarter of the year to a high of 2.38% in the second quarter) and debt-to-equity ratio (between 3.0x and 3.1x for all four quarters of 2013) remained relatively constant throughout 2013. As a result, MFA delivered a high single-digit return on average equity (“ROAE”) and a positive total stockholder return

which follow.

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The table on page 37 of this Proxy Statement sets forth the portions of each executive’s total 2014 annual bonuses that were paid in cash and fully-vested shares of our Common Stock with a mandatory three-year holding period from the date of grant.

As discussed in more detail below, the Compensation Committee, among other things, made the following decisions and took the following actions on compensation for the Named Executive Officers for 2013:

Consideration of 20132014 Advisory Vote and Management Succession on Executive Compensation

At our Annual Meeting of Stockholders held in May 2013,2014, approximately 82%92% of the votes cast with respect to the say-on-pay proposal voted to approve our executive compensation for 2012. As a result of such vote, the2013. The Compensation Committee did not makehas considered the results of the 2014 say-on-pay vote and believes that the significant changessupport of MFA stockholders in this vote reflects support for MFA’s approach to our executive compensation program for performance year 2013.

As indicated above,and the changes implemented in connection with the management succession that took place at year-end, the Compensation Committee underbook a reviewend of our compensation program. In connection with this review, the Compensation Committee considered the feedback of certain of its stockholders and others in structuring the elements of Messrs. Gorin’s and Knutson’s new employment agreements and the redesign of the long-term incentive award program, which were entered into and implemented in early 2014. These changes include a more formulaic approach to the determination of Mr. Gorin’s and Mr. Knutson’s annual bonus and a three-year vesting period for time-based and performance-based RSUs. For additional information regarding these and other changes to our compensation program, see “Changes to Compensation Program for 2014” on pages 33 to 35 and “Employment Contracts” on pages 47 to 51.

2013. The Compensation Committee will continue to consider the outcome of future Say-on-Pay votes and other stockholder input, as well as available market data, in making future decisions regarding executive compensation.

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Compensation Philosophy and Objectives.Objectives

Through our executive compensation programs, we seek to retain, motivate and attract top quality senior executives who are committed to our core values of excellence and integrity. The Compensation Committee’s fundamental philosophy is to closely align these

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REIT itself is required to disclose little to no compensation information regarding its executives. Furthermore, the Compensation Committee believes that any peer group for compensation purposes that is comprised solely of internally-advised residential mortgage REITs would be too small a group to provide meaningful comparative information. Because of the limited compensation information available for mortgage REITs, the Compensation Committee has, in consultation with FTI Consulting, developed a peer group, which extends beyond mortgage REITs. This peer group also includes a number of other real estate-focused finance companies in both the residential and commercial sectors, the executives of which are required to have similar skills and experience as the executives of MFA, including the evaluation of interest rate risk, credit risk and allocation of capital (which are skills required in connection with the evaluation of Agency and Non-Agency residential mortgage-backed securities, as well as other residential mortgage assets). In addition, the peer group includes companies that have, in prior years, been identified by the proxy advisory firms as comparable to MFA in their evaluation of MFA in connection with developing their annual Say-on-Pay vote recommendation. In considering the peer group analysis provided by FTI Consulting, the Compensation Committee recognized that the peer group did not include externally-managed mortgage REIT’s because comprehensive compensation data for their executives are generally not publicly available. In addition, the Compensation Committee did not include generally higher paying private equity firms and hedge funds with which MFA must compete for executive talent. These organizations were not included in the peer group because they have different business economics and pay models than MFA and due to the fact that data regarding their compensation of executives also is generally not publicly available.

With the above in mind the Compensation Committee, at its meeting held in September 2014, identified the following companies against which Company performance would be compared and compensation practices would be reviewed:

American Capital, Ltd.		Ocwen Financial Corp.
Capstead Mortgage Corporation		PennyMac Financial Services, Inc.
CYS Investments, Inc.		Radian Group, Inc.
Highwoods Properties, Inc.		Redwood Trust, Inc.
iStar Financial, Inc.		TFS Financial Corporation
MGIC Investment Corporation		Virtus Investment Partners, Inc.
Nationstar Mortgage Holdings, Inc.		Walter Investment Management Corp.

The group of companies identified above that the Compensation Committee used in 2014 reflects certain changes compared to the group that the Compensation Committee used for 2013. In particular, the following companies, which were included in the peer group used by the Compensation Committee for analyzing 2013 executive compensation, were not included in the peer group set forth above: Arlington Asset Investment Corp., Dynex Capital, Inc., New York Mortgage Trust, Inc., NewStar Financial, Inc., Northstar Realty Finance Corporation and RAIT Financial Trust. These companies were not included in the 2014 peer group due to, among other things, the significant disparity in market capitalizations as compared to MFA’s and/or changes in their businesses so as to make them less comparable to the business of the Company.

Additionally, based on the Compensation Committee’s peer group review performed during 2014, the Compensation Committee determined that it would no longer utilize a second peer group consisting of both internally-managed and externally-managed mortgage REITs solely for performance evaluation purposes, but rather would only utilize one peer group for both purposes to enhance the clarity and transparency of its compensation decision-making process.

Components of Compensation.Compensation

The Compensation Committee believes that it is important to create compensation programs that appropriately balance short-term, cash-based compensation with long-term, equity-based compensation. Our executive officer compensation program includes the following primary components:

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In addition to the primary components of the executive officer compensation program, we maintain our Senior Officers Deferred Bonus Plan (the “Senior Officers Plan”). The Senior Officers Plan (a description of which can be found on pages 3240 and 4649) of this Proxy Statement), permits our executive officers to defer, at their election, up to 100% of their annual bonus compensation in the form of deferred stock units. The performance of the deferred stock units is tied to the performance of our Common Stock.

Other than the opportunity to participate in the Senior Officers Plan, we do not provide perquisites or other benefits to our Named Executive Officers beyond those provided to all of our other salaried employees.

The Compensation Committee regularly reviews and evaluates executive officer compensation levels and our compensation program. It is the Compensation Committee’s view that compensation decisions are complex and best made after a deliberative review of Company and individual performance, as well as industry compensation levels. Consistent with this view, the Compensation Committee annually assesses our performance within the context of the industry’s overall performance and internal performance standards and evaluates individual executive officer performance relative to the performance expectations for their respective position, role and responsibilities within MFA.

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Use of Peer Groups.  The Compensation Committee benchmarks from time to time the compensation levels and practices relating to our Named Executive Officers and other executive officers against industry-based compensation levels and practices, and in this regard during 2013 the Compensation Committee, with the assistance of its independent compensation consultant, FTI Consulting, Inc. (“FTI Consulting”), undertook a benchmarking analysis with respect to the compensation levels and practices of its Named Executive Officers. While it is the Compensation Committee’s goal to provide compensation opportunities that reflect Company and individual performance and that are competitive within industry standards, the Compensation Committee has not established, nor does it seek to establish, a specific target market position for executive officer pay levels, as pay practices and compensation levels among participants in our industry can vary significantly from one year to the next such that the use of a specific target market position would not necessarily reflect the Compensation Committee’s assessment of performance as the primary driver of pay levels.

During the last quarter of 2013, the Compensation Committee, with the assistance of FTI Consulting, undertook a broad review of MFA’s peer group. The Compensation Committee believes that during the past several years it has had the difficult challenge of developing a peer group for executive compensation purposes in the residential mortgage REIT sector because a large number of companies in the sector are or have become externally advised and as a result, these companies have few, if any, employees that are compensated directly by the REIT. Rather, such persons’ compensation is paid by the external manager of the REIT, and as a result, the REIT itself is required to disclose little to no compensation information regarding its executives. As a result, the Compensation Committee believes that any peer group for compensation purposes that is comprised solely of residential mortgage REITs is too small a group to provide meaningful comparative information. Because of the limited compensation information available for mortgage REITs, the Compensation Committee has, in consultation with FTI Consulting, developed two peer groups: (i) one for executive compensation purposes, which goes beyond solely that of mortgage REITs to also include a number of other real estate-focused finance companies in both the residential and commercial sectors, the executives of which are required to have similar skills and experience as the executives of MFA, including the evaluation of credit risk and allocation of capital (which are skills required in connection with the evaluation of Non-Agency residential MBS), and (ii) one for the comparison of company performance, which includes both internally-managed and externally-advised firms in the residential finance REIT sector with whom we compete for investment opportunities and investing dollars.

With the above in mind, for purposes of benchmarking executive officer compensation, the Compensation Committee reviewed compensation levels and practices at the following companies:

Arlington Asset Investment Corp.		NewStar Financial, Inc.
Capstead Mortgage Corporation		NorthStar Realty Finance Corporation
CYS Investment, Inc.		Ocwen Financial Corporation
Dynex Capital, Inc.		PennyMac Financial Services, Inc.
iStar Financial Inc.		RAIT Financial Trust
Nationstar Mortgage Holdings, Inc.		Redwood Trust, Inc.
New York Mortgage Trust, Inc.		Walter Investment Management Corp.

In comparing our total stockholder return and other measures of company performance, the Compensation Committee evaluated the following companies:

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Annual Incentives

Messrs. Zimmerman and Gorin.  For the Bonus Pool calculation, our ROAE for the 12 months ended November 30, 2013, was 9.655% and, in accordance with the terms of Messrs. Zimmerman and Gorin’s employment agreements, the 2013 Bonus Pool could range from $2,250,000 to $2,700,000 (subject to the discretionary adjustment of the Compensation Committee).

Based upon their assessment and evaluation, the Compensation Committee set the amount of the Bonus Pool at $2,700,000. The Compensation Committee determined not to exercise its discretion to make any upward or downward adjustment to the Bonus Pool from the amount determined by reference to the ROAE formula described above. In determining to set the 2013 Bonus Pool at $2,700,000, the Compensation Committee took into consideration the relevant factors impacting our 2013 financial performance, including a strategy of using less leverage than many other financial institutions and mortgage REITs, the execution of our asset allocation strategy, our total stockholder return of approximately 5.35% (assuming reinvestment of dividends) during the 12 months ended November 30, 2013, the comparative financial performance of industry peers and the individual performance of Messrs. Zimmerman and Gorin (individually and collectively).

The Compensation Committee then considered each executive’s contributions to our 2013 financial results and other individual accomplishments in determining individual bonuses.

The specific key factors considered by the Compensation Committee for each executive were as follows:

Based on thisthe above-described review, the Compensation Committee determined the followingIRM Bonuses for each executive for 2014. The target amount of this component of annual bonus, levels forthe percentage of that target amount earned and the total amount of the 2014 IRM Bonuses earned by each executive is set forth in the table below:

Executive		Target IRM Bonus ($)				% of IRM Bonus Earned				2014 IRM Bonus Earned ($)(1)
Mr. Gorin		$	562,500				100.00	%		$	562,500
Mr. Knutson		$	450,000				100.00	%		$	450,000

In determining the amount of Mr. ZimmermanGorin’s and Mr. Gorin:

		Cash Bonus				Restricted Shares
						Shares				Value				Total Bonus
S. Zimmerman		$	1,200,000				—			$	—			$	1,200,000
W. S. Gorin			1,125,000				52,669				375,000				1,500,000

As indicated above, in light of Mr. Zimmerman’s retirement from the Company at year-end and his contemporaneous resignation from our Board,Knutson’s IRM Bonuses, the Compensation Committee awardedtook into account the executives’ collective achievement during the course of the year in delivering consistent and attractive returns on MFA’s portfolio of assets while effectively managing the risks relating to our portfolio of mortgage-related assets, including maintaining a low level of leverage relative to other residential mortgage REITs, maintaining a low level of duration (which is a measure of interest rate sensitivity) for our overall portfolio and maintaining a consistent and appropriate level of liquidity to meet our cash needs. The Compensation Committee also noted Messrs. Gorin’s and Knutson’s leadership in evaluating and expanding the types of assets in which MFA invests, including mortgage-back securities backed by re-performing and non-performing loans (RPL/NPL RMBS) and residential whole loans. On an individual basis, the Compensation Committee took into account Mr. Zimmerman’s 2013Gorin’s achievements during his initial year as CEO, including maintaining and building on the Company’s relationships with counterparties, industry groups and other constituencies important to our business success, as well as fostering an inclusive corporate culture throughout the organization. With respect to Mr. Knutson, the Compensation Committee took into account his leadership in the selection and successful management of the our credit sensitive assets, including our Non-Agency RMBS, RPL/NPL RMBS and residential whole loans, as well as leadership in overseeing certain of the staff functions within the Company.

Determination of Form of Payment of 2014 Annual Bonuses for Messrs. Gorin and Knutson.   As indicated on page 34 of this Proxy Statement, Messrs. Gorin’s and Knutson’s employment agreements provide that any annual incentive awards in excess of their current base salaries would be paid 50% in cash and 50% in fully vested shares of Common Stock with a mandatory three-year holding period. The table below sets forth the application of this formula to the 2014 annual bonus solelyamounts for Messrs. Gorin and Knutson and shows the portion of each executive’s total 2014 annual bonus that was paid in cash asand in the rationale for tying Mr. Zimmerman’s performanceform of Common Stock.

Executive		Total 2014 Bonus Earned ($)				Portion of 2014 Bonus Paid in Cash ($/%)				Portion of 2014 Bonus Paid in Common Stock ($/%)(1)
Mr. Gorin		$	3,350,651			$	2,075,326/61.9	%		$	1,275,325/38.1	%
Mr. Knutson		$	2,680,521			$	1,690,261/63.1	%		$	990,260/36.9	%

Messrs. Yadav and Kristjansson.  Pursuant to thatthe terms of our stockholders had become less compellingtheir respective employment agreements, Messrs. Yadav and also because he would continue to own a significant amount of our stock that remained restricted from sale or transfer for a period of time following his retirement.

The Restricted Shares awarded to Mr. Gorin vest ratably over four years, with approximately 6.25% of the shares vesting on the last business day of each calendar quarter beginning with the quarter ended March 31, 2014, and ending with the quarter ending December 31, 2017. Dividends on Mr. Gorin’s Restricted Shares accrue during the restriction period andKristjansson are paid in full only on the vesting date of the applicable shares.

Mr. Knutson.  As identified above, for 2013, Mr. Knutson was eligible to receive an annual performance bonus in such amount as approved by the Compensation Committee. In determining the amount of Mr. Knutson’s annual performance bonus for 2013 the Compensation Committee considered, among other factors, our ROAE for the 12-month period ended November 30, 2013. In addition, the Compensation Committee also assessed, among other things, our leverage strategy, our share price

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performance relative to the S&P Financial Index, our share price performance relative to our peer group, our total stockholder return, as well as Mr. Knutson’s individual performance, including his increased management responsibilities in anticipation of his promotion following year-end. Taking the assessment of these factors into account, the Compensation Committee determined to award Mr. Knutson an annual incentive bonus of $1,800,000. In determining the ultimate amount of Mr. Knutson’s bonus, the Compensation Committee took into account Mr. Knutson’s role in leading the successful management and asset selection of our credit sensitive Non-Agency MBS portfolio, on which credit fundamentals improved during 2013 due to strong home price appreciation and loan amortization for many of the mortgages underlying the portfolio.

Of the annual incentive compensation of $1,800,000 awarded to Mr. Knutson for 2013, he received a payment of $1,350,000 in cash and $450,000 in the form of 63,203 Restricted Shares that vest ratably over four years, with approximately 6.25% of the shares vesting on the last business day of each calendar quarter beginning with the quarter ended March 31, 2014, and ending with the quarter ending December 31, 2017. Dividends on these Restricted Shares accrue during the restriction period and are paid in full only on the vesting date of the applicable shares.

Mr. Freydberg.  Under the terms of his former employment agreement, Mr. Freydberg was eligible to receive an annual performance bonus in such amount as approved by the Compensation Committee after receivingin its discretion. For 2014, the input of our CEO. Annual incentive compensation for Mr. Freydberg is based upon subjective assessments and evaluation of MFA’s annual performance and his individual performance. After receivingCompensation Committee, with the input of Mr. Zimmerman,Gorin and Mr. Knutson, awarded the following bonuses to each of Mr. Yadav and Mr. Kristjansson:

Executive		Total 2014 Bonus Earned ($)				Amount of 2014 Bonus Paid in Cash ($)				Amount of 2014 Bonus Paid in Common Stock(1) ($)
Mr. Yadav			801,977				561,384				240,593
Mr. Kristjansson			618,059				432,641				185,418

Although the amounts of Messrs. Yadav’s and Kristjansson’s respective annual bonuses were determined in the discretion of the Compensation Committee, recommended,in determining the level of their bonuses, the Compensation Committee used a framework for its decisions that was similar to the methodology that it used to determine the annual bonus amount for Messrs. Gorin and Knutson. In order to guide its decision making, the Board approvedCompensation Committee, with the input of Messrs. Gorin and Knutson, assumed a “target” overall bonus for Mr. Yadav of $650,000 and “target” overall bonus for Mr. Kristjansson of $500,000, which amounts were comparable to each executive’s respective bonus that was awarded to him for 2013. The Compensation Committee then employed an annual incentiveillustrative scenario in which 50% of each executive’s target would be tied to Adjusted ROAE for the performance period from December 1, 2013 to November 30, 2014 (using the same methodology as used to calculate Messrs. Gorin’s and Knutson’s ROAE Bonus, which is described above) with the balance of each executive’s target tied to an assessment of the executive’s individual performance and overall company performance. As this approach was a framework for its decision making, the Compensation Committee then used its judgment and discretion to adjust the outcomes to arrive at the actual amount of each executive’s bonus.

The Compensation Committee believed that using this approach as a guide for its 2014 bonus decisions for Messrs. Yadav and Kristjansson was appropriate in light of $260,000 for 2013, all of which was paidtheir key roles in cash. As onethe asset selection and management of our Executive Vice Presidents,Non-Agency and Agency RMBS portfolios, which are the principal portfolios that drive our earnings and returns, as well as, in the case of Mr. Freydberg successfully performedKristjansson, his key role in the functionsmanagement of head of agency MBS funding and head of information systems and operations in 2013.our overall interest-rate risk.

Mr. Yarad.  Mr. Yarad is eligible to receive an annual performance bonus in such amount as approved by the Compensation Committee after receiving the input of our CEO. Annual incentive compensation for Mr. Yarad is based upon subjective assessments and evaluation of MFA’s annual performance and his individual performance. After receiving the input of Mr. Zimmerman,Gorin, the Compensation Committee recommended, and the Board approved an annual incentive bonus of $268,000$280,000 for 2013,2014, of which $216,000$224,000 was paid in cash and $52,000$56,000 was paid in the form of 7,304 Restricted Sharesfully-vested shares of our Common Stock that vest annually in 25% increments on December 12, 2013, 2014, 2015 and 2016. Dividends are paid currently on Mr. Yarad’s vested and unvested Restricted Shares.subject to a mandatory three-year holding period. The decision to increase Mr. Yarad’s bonus as compared to that which he was awarded for 20122013 was made based on, among other things, his efforts in directing the activities performed by our finance and accounting staff in support of our business activities, including his contributions in upgradingestablishing the process by which we determineaccounting, financial reporting and internal control framework for our taxable income underinvestments in residential whole loans and the rules and regulations applicablereorganization of our operating structure to REITs,facilitate such investments, as well as overall company performance.

2014 Long-Term Equity-Based Incentive Awards

*****

The vesting conditions forUnder the Restricted Shares delivered as partterms of the 2013 annual incentive awards vary betweentheir employment agreement, Messrs. Gorin and Knutson were granted RSUs, consisting of 82,500 time-based RSUs (“TRSUs”) and Mr. Yarad, which is primarily a reflectiontarget amount of 82,500 performance-based RSUs (“PRSUs”) and 70,000 TRSUs and a target amount of 70,000 PRSUs, respectively, in January 2014. In addition, in order to further align the interests of the termsother Named Executive Officers and foster their retention, the Compensation Committee also made awards of TRSUs and PRSUs to Messrs. Yadav, Kristjansson and Yarad.

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Dividend equivalents will not be paid in respect of the PRSUs during the performance period. Rather, dividend equivalents will accrue with respect to the PRSUs during the performance period, and to the extent that the underlying PRSUs vest, an amount equal to the accrued dividend equivalents related to the vested PRSUs will be paid to the executive in the form of additional shares of Common Stock based on the closing price of the Common Stock on the vesting date.

The number and grant date fair value of TRSUs and PRSUs comprising the 2014 long-term equity-based awards granted to each of the Named Executive Officers are set forth in the table below:

		TRSUs								PRSUs
Executive		#				Aggregate Grant Date Fair Value(1) $				#				Aggregate Grant Date Fair Value(1) $
Mr. Gorin			82,500			$	593,101				82,500			$	484,523
Mr. Knutson			70,000			$	503,237				70,000			$	411,110
Mr. Yadav			17,500			$	125,809				17,500			$	102,778
Mr. Kristjansson			17,500			$	125,809				17,500			$	102,778
Mr. Yarad			10,000			$	71,891				10,000			$	58,730

In addition to his TRSUs and PRSU grants, in connection with his promotion to CEO, Mr. Gorin and Knutson) or applicable equity award agreement (inwas granted 70,621 RSUs (with an aggregate grant date fair value of $507,765), which were fully-vested at the casetime of Mr. Yarad).grant. These RSUs settle in the form of one share of Common Stock for each RSU in January 2017. These RSUs pay dividend equivalents in the form of cash payments during the period in which they are outstanding.

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OtherOther Elements of Compensation.  The following briefly summarizes the other elements of compensation that we provide to our Named Executive Officers beyond salary, annual incentives and long-term equity awards.

Deferred Compensation and Retirement Benefits.  In 2002, the Board adopted the Senior Officers Plan, which gives executive officers the ability to elect to defer up to 100% of their annual cash incentive compensation. Amounts deferred under this plan are subject to a five-year deferral period and can be paid in a lump sum or in installment payments at the termination of the deferral period. The Senior Officers Plan is intended to provide executive officers with an opportunity to defer certain compensation. Amounts deferred under the plan are considered to be converted into “stock units” of MFA, which do not represent

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and Freydberg,Kristjansson, including the circumstances in which severance is payable and the amount of such severance benefits, see “Employment Contracts” on pages 4749 to 5153 and “Potential Payments upon Termination of Employment or Change in Control” on pages 5153 to 5456 of this Proxy Statement.

The Compensation Committee believes that the written employment agreements have been responsibly structured, including as follows:

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Compensation of Executive Officers

The following table summarizes the compensation of our Named Executive Officers for the years ended December 31, 2014, 2013 and 2012 (other than for Mr. Yadav and 2011.Mr. Kristjansson, who were not Named Executive Officers in 2013 and 2012).

Summary Compensation Table⁽¹⁾

Name and Principal Position		Year				Salary ($)				Bonus ($)(3)				Stock Awards ($)(1)(4)(5)(6)				All Other Compensation ($)(7)				Total ($)
S. Zimmerman Former Chairman and Chief Executive Officer(2)			2013			$	900,000			$	1,200,000			$	103,334			$	272,700			$	2,476,034
			2012				900,000				1,750,000				1,027,370				185,950				3,863,320
			2011				900,000				1,450,000				648,866				189,250				3,188,116
W. S. Gorin President(2)			2013				800,000				1,125,000				523,741				152,000				2,600,741
			2012				800,000				1,120,000				620,029				105,200				2,645,229
			2011				800,000				1,150,000				1,072,587				106,800				3,129,387
C. L. Knutson Executive Vice President(2)			2013				450,000				1,350,000				549,129				10,000				2,359,129
			2012				450,000				1,176,000				643,475				10,200				2,279,675
			2011				437,500				1,000,000				781,696				9,800				2,228,996
R. A. Freydberg Executive Vice President			2013				750,000				260,000				39,666				152,000				1,201,666
			2012				750,000				330,400				195,838				105,200				1,381,438
			2011				750,000				300,000				252,693				106,800				1,409,493
S. D. Yarad Chief Financial Officer			2013				440,000				216,000				52,004				10,000				718,004
			2012				357,000				185,850				61,729				10,200				614,779
			2011				350,000				180,000				30,000				9,800				569,800

Name and Principal Position		Year				Salary ($)				Bonus ($)(3)				Stock Awards ($)(4)(5)				Non-equity Incentive Plan Compensation ($)(6)				All Other Compensation ($)(7)				Total ($)
W. S. Gorin Chief Executive Officer(2)			2014				800,000				348,447				2,860,720				1,726,879				10,400				5,746,446
			2013				800,000				1,125,000				523,741				—				152,000				2,600,741
			2012				800,000				1,120,000				620,029				—				105,200				2,645,229
C. L. Knutson President and Chief Operating Officer(2)			2014				700,000				283,795				1,904,609				1,406,466				10,400				4,305,270
			2013				450,000				1,350,000				549,129				—				10,000				2,359,129
			2012				450,000				1,176,000				643,475				—				10,200				2,279,675
S. Yadav Senior Vice President			2014				300,000				561,384				469,180				—				10,400				1,340,964
G. Kristjansson Senior Vice President			2014				280,000				432,641				414,005				—				10,400				1,137,046
S. D. Yarad Chief Financial Officer			2014				450,000				224,000				186,624				—				10,400				871,024
			2013				440,000				216,000				52,004				—				10,000				718,004
			2012				357,000				185,850				61,729				—				10,200				614,779

(1)

Material terms of the employment agreements of the Named Executive Officers, other than Mr. Yarad, who does not have an employment agreement, are provided under “Employment Contracts” on pages 4749 to 5153 of this Proxy Statement.

(2)

Mr. Zimmerman retired as CEO on December 31, 2013 and resigned from our Board contemporaneous therewith. Mr. Gorin was elected CEOpromoted to Chief Executive Officer effective January 1, 2014. During 2013 and 2012, he served as MFA’s President. Mr. Knutson was electedpromoted to President and Chief Operating Officer effective January 1, 2014. During 2013 and 2012, he served as an Executive Vice President of MFA.

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average total shareholder return (“TSR”) target during the three-year performance period and assumes that “target” performance is achieved. The target value of these PRSUs (which is included in the column) is as follows: for Mr. Gorin, $484,523; for Mr. Knutson, $411,110; for Mr. Yadav, $102,778; for Mr. Kristjansson, $102,778; and for Mr. Yarad, $58,730. The maximum value of these PRSUs as of the grant date assuming the highest level of performance is achieved is as follows: for Mr. Gorin, $969,046; for Mr. Knutson, $822,220; for Mr. Yadav, $205,556; for Mr. Kristjansson, $205,556; and for Mr. Yarad, $117,460. A description of these PRSU awards, including the vesting and performance conditions of such awards, can be found in note 6 to the Grant of Plan-Based Awards table below.

(5)

Amounts in this column exclude (i) accrued dividends that are ultimately paid to the executive on the vesting of Restricted Shares,restricted shares of Common Stock previously granted to the executive, (ii) dividends paid on unvested Restricted Sharesrestricted shares of Common Stock and (iii) dividend equivalent rights (“DERs”)equivalents paid in respect of outstanding RSUsrestricted stock units (both vested and unvested). DERs represent the right to receive, withDividend equivalents consist of a cash distribution in respect toof each DER, a distributionrestricted stock unit equal to the cash dividend paid on a share of Common Stock. The right to receive dividends and the cash distributions on DERs,dividend equivalents, as the case may be, were factored into the grant date fair value of the Restricted Sharesrestricted shares of Common Stock and RSUsrestricted stock units reported for each year in the column, as well as for other Restricted Sharesrestricted shares of Common Stock and RSUsrestricted stock units previously granted to the Named Executive Officers. The following table sets forth the amount of accrued dividends on Restricted Sharesrestricted shares of Common Stock and cash distributions on DERsdividend equivalents, received by the Named Executive Officers in 2013:2014:

Name		Cash Distributions on DERs ($)				Accrued Dividends to be Paid on Vesting of Restricted Shares ($)				Dividends Paid on Unvested Restricted Shares ($)				Cash Dividend Equivalents ($)				Accrued Dividends to be Paid on Vesting of Restricted Shares ($)				Dividends Paid on Unvested Restricted Shares ($)
S. Zimmerman		$	131,082			$	50,552				—
W. S. Gorin			367,945				210,051				—				192,682				187,824				—
C. L. Knutson			276,290				57,348			$	65,011				130,825				50,607				11,578
R. A. Freydberg			180,753				123,872				23,937
S. Yadav															52,500				—				22,618
G. Kristjansson															52,500				—				16,790
S. D. Yarad			49,200				—				13,917				30,000				—				8,292

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		Type of Award(1)				Grant Date				Estimated Future Payouts Under Equity Incentive Plan Awards Target(2) (#)				All Other Stock Awards: Number of Shares of Stock or Units (#)				Grant Date Fair Value of Stock and Option Awards(3) ($)
S. Yadav			TRSU				01/24/2014	(5)			—				17,500				125,809
			PRSU				01/24/2014	(6)			17,500				—				102,778
			RS				12/09/2014	(7)			—				28,883				240,593
G. Kristjansson			TRSU				01/24/2014	(5)			—				17,500				125,809
			PRSU				01/24/2014	(6)			17,500				—				102,778
			RS				12/09/2014	(7)			—				22,260				185,418
S. D. Yarad			TRSU				01/24/2014	(5)			—				10,000				71,891
			PRSU				01/24/2014	(6)			10,000				—				58,730
			RS				12/09/2014	(7)			—				6,723				56,003

Salary = annual stock grant paid as part of annual base salary

RS = Restricted Sharesshares of Common Stock granted as part of annual incentive award

RSU = Vested RSU

TRSU = Time-based RSUs

PRSU = Performance-based RSUs

Dividend equivalents will not be paid in respect of the PRSUs during the performance period. Rather, dividend equivalents will accrue with respect to the PRSUs during the performance period, and to the extent that the underlying PRSUs vest, an amount equal to the accrued dividend equivalents related to

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the vested PRSUs will be paid to the Named Executive Officer in the form of additional shares of Common Stock based on the closing price of the Common Stock on the vesting date.

The PRSUs will be settled in an equivalent number of shares of our Common Stock within 30 days following the vesting date.

Additional discussionInformation regarding the vesting of the awards set forth in the table above upon termination of employment or change in control of MFA can be found under “Employment Contracts” on pages 4749 to 5153 of this Proxy Statement.