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ANNALY CAPITAL MANAGEMENT, INC.

(Name of Registrant as Specified In Its Charter)

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Notice of Annual Meeting of Stockholders

ANNALY CAPITAL MANAGEMENT, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To be Held May 21, 2015

To the Stockholders of Annaly Capital Management, Inc.:

WeAnnaly Capital Management, Inc., a Maryland corporation (“Annaly” or the “Company”), will hold theits annual meeting of the stockholders of Annaly(the “Annual Meeting”) on May 21, 2015,23, 2018, at 9:00 a.m., New York time, (Eastern Time) online at the Warwick Hotel, 65 West 54th Street, New York, New York 10019, to consider and vote on the following proposals:www.virtualshareholdermeeting.com/NLY2018, to:

The Company will also transact any other business as may properly come before the Annual Meeting or any postponement or adjournment thereof. Only our common stockholders of record at the close of business on March 27, 2015,26, 2018, the record date for the annual meeting,Annual Meeting, may vote at the annual meetingAnnual Meeting and any postponements or adjournments or postponements of it. A complete list of our common stockholders of record entitled to vote at the annual meeting will be available for inspection during the 10 business days before the annual meeting at our executive offices during ordinary business hours for proper purposes.thereof.

Your vote is very important. Please exercise your right to vote.

The Company’s Board of Directors (“Board”) is soliciting proxies in connection with the Annual Meeting. The Company is sending the Notice of Internet Availability of Proxy Materials (“Notice”), or a printed copy of the proxy materials, as applicable, commencing on or about April 10, 2018.

To view the Proxy Statement and other materials about the Annual Meeting, go to www.annalyannualmeeting.com or www.proxyvote.com.

All stockholders are cordially invited to attend the Annual Meeting, which will be conducted via a live webcast. The Company is excited to embrace the environmentally-friendly virtual meeting format, which it believes will enable increased stockholder attendance and participation. During this virtual meeting, you may ask questions and will be able to vote your shares electronically. You may also submit questions in advance of the Annual Meeting by visiting www.proxyvote.com. The Company will respond to as many inquiries at the Annual Meeting as time allows.

An audio broadcast of the Annual Meeting will also be available to stockholders by telephone toll-free at 1-877-328-2502. If you plan to attend the annual meeting in person,Annual Meeting online or listen to the telephonic audio broadcast, you will need to presentthe 16-digit control number included in your admission ticket, or an account statement showing your ownership of our common stock as of the record date, and valid government issued photo identification. The indicated portion ofNotice, on your proxy card or voter instruction cardon the instructions that accompany your proxy materials. Please note that listening to the audio broadcast will serve as your admission ticket.not be deemed to be attending the Annual Meeting, and you cannot vote from such audio broadcast. The Annual Meeting will begin promptly at 9:00 a.m. (Eastern Time). Online check-in will begin at 8:30 a.m. (Eastern Time), and you should allow ample time for the online check-in procedures.

OurIf you wish to watch the webcast at a location provided by the Company, the Company’s Maryland counsel, Venable LLP, will air the webcast at its offices located at 750 E. Pratt Street, Suite 900, Baltimore, MD 21202. Please note that no members of management or the Board of Directors recommends thatwill be in attendance at this location. If you vote:would like to view the Annual Meeting webcast at Venable LLP’s office, please follow the directions for doing so set forth in the “Questions and Answers about the Annual Meeting” section in this Proxy Statement.

●	“FOR” the election of each of the nominees as Directors;
●	“FOR” approval of the non-binding advisory resolution on executive compensation; and
●	“FOR” the ratification of the appointment of Ernst & Young LLP as our independentregistered public accounting firm for 2015.

By Order of the Board of Directors,

R. Nicholas Singh
Chief Legal Officer and Secretary
April 9, 201510, 2018

Table of Contentson Form 10-K carefully before voting.

QUESTIONS AND ANSWERS ABOUT THE2018 ANNUAL MEETING OF STOCKHOLDERS				1
WHERE YOU CAN FIND MORE INFORMATION	5
PROPOSAL 1 ELECTION OF DIRECTORS		6TIME AND DATE:	Wednesday, May 23, 2018 at 9:00 a.m. (Eastern Time)
Class I Directors	7
Class II Directors		8PLACE:	www.virtualshareholdermeeting.com/NLY2018
Class III Directors	9
CORPORATE GOVERNANCE, DIRECTOR INDEPENDENCE, BOARD MEETINGS AND COMMITTEES		10RECORD DATE:	Close of business on March 26, 2018
Corporate Governance	10
		VOTING:	Stockholders are able to vote by Internet at www.proxyvote.com; telephone at 1-800-690-6903; by completing and returning their proxy card; or online at the Annual Meeting

VOTING MATTERS

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ANNALY CAPITAL MANAGEMENT, INC.
1211 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
______________________

2015 ANNUAL MEETING OF STOCKHOLDERS
______________________

PROXY STATEMENT

Annaly Capital Management, Inc. (“Annaly”, “we”, “our” or “us”) is furnishing this proxy statement in connection with our solicitation of proxies to be voted at our 2015 annual meeting of stockholders. We will hold the annual meeting at the Warwick Hotel, 65 West 54th Street, New York, New York 10019, on Thursday, May 21, 2015 at 9:00 a.m. New York time, and any postponements or adjournments thereof. We are sending this proxy statement and the enclosed proxy to our stockholders commencing on or about April 10, 2015.

PARTICIPATE IN THE ANNUAL MEETING

After years of declining attendance by stockholders at Annaly’s in-person annual meetings, the Company is moving to an online format for this year’s Annual Meeting. By hosting the Annual Meeting virtually, Annaly is able to communicate more effectively with its stockholders, enable increased attendance and participation from locations around the world and reduce costs for both the Company and its stockholders. This approach also aligns with the Company’s broader sustainability goals. The virtual meeting has been designed to provide the same rights to participate as you would have at an in-person meeting, including providing opportunities to make statements and ask questions.

VOTING Stockholders are entitled to vote by
INTERNET www.proxyvote.com
TELEPHONE 1-800-690-6903
MAIL completing and returning their proxy card
ONLINE at the Annual Meeting INFORMATION www.annalyannualmeeting.com

You are entitled to participate and vote at the Annual Meeting by visiting www.virtualshareholdermeeting.com/NLY2018. An audio broadcast of the Annual Meeting will also be available to stockholders by telephone toll-free at 1-877-328-2502. If you plan to attend the Annual Meeting online or listen to the telephonic audio broadcast, you will need the 16-digit control number included in your Notice, on your proxy card or on the instructions that accompany your proxy materials. Please note that listening to the audio broadcast will not be deemed to be attending the Annual Meeting and you cannot vote from such audio broadcast. Stockholders can access Annaly’s interactive pre-meeting forum, where you can submit questions in advance of the Annual Meeting and view copies of the Company’s proxy materials, by visiting www.proxyvote.com.

If you wish to watch the webcast at a location provided by the Company, the Company’s Maryland counsel, Venable LLP, will air the webcast at its offices located at 750 E. Pratt Street, Suite 900, Baltimore, MD 2102. Please note that no members of management or the Board will be in attendance at this location. If you wish to view the Annual Meeting via webcast at Venable LLP’s office, please complete theReservation Request Form found at the end of this Proxy Statement. For additional information on the Annual Meeting, and for copies of the Company’s Proxy Statement and 2017 Annual Report, please visit Annaly’s Annual Meeting informational website at www.annalyannualmeeting.com.

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Proxy Summary

The Company has been externally-managed by Annaly Management Company LLC (the “Manager”) since July 2013. The Manager is responsible for managing the Company’s affairs pursuant to a management agreement. The Manager pays all of the compensation, including benefits, to its employees (which include the named executive officers (“NEOs”) other than Mr. Keyes, who receives no compensation for his services as the Company’s Chief Executive Officer (“CEO”), but has an interest in the management fee as an indirect equityholder of the Manager). Although certain personnel (but none of the NEOs) are employed by subsidiaries of the Company for regulatory or corporate efficiency reasons, all compensation and benefits paid to such personnel by these subsidiaries reduce, on a dollar-for-dollar basis, the management fee the Company pays to the Manager. As of December 31, 2017, the Manager had 146 employees and Annaly’s subsidiaries collectively had six employees. For ease of reference, throughout this Proxy Statement, the NEOs and the other employees of the Manager, together with employees of Annaly’s subsidiaries, are sometimes referred to as Annaly’s employees.

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Proxy Summary

ANNALY’S DIVERSIFIED INVESTMENT STRATEGY

Diversification is a key component of the Annaly strategy. Since 2014, Annaly has diversified its business model by investing in credit assets, which complement the Company’s primary portfolio of interest rate sensitive investments. This strategy is designed to achieve stable risk-adjusted earnings and book value performance over various interest rate and economic cycles by pairing shorter duration floating-rate credit securities with the Company’s longer duration, fixed-rate agency portfolio. Annaly now has four distinct investment groups, which provide access to over 36 investment options and structures. While managing investment decisions, the Company combines a robust capital allocation process with careful risk management. This process enables Annaly to take advantage of market fluctuations and inefficiencies and rotate into credit markets when dislocations occur and pricing is attractive on a risk-adjusted, relative value basis.

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Proxy Summary

The Company has 36 investment options across its four investment groups, which is nearly three times more than in 2013 and up from 26 options at the end of 2015.

DIVIDENDS

From Annaly’s IPO in 1997 through December 31, 2017, the Company has declared over $16 billion in common and preferred dividends to its stockholders. In 2017, Annaly declared over $1.4 billion in common and preferred dividends.

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Proxy Summary

DELIVERING SIGNIFICANT VALUE FOR STOCKHOLDERS

Since 2014 (the first full year the Company was externally-managed, as more fully described in “Management Structure” on page38), Annaly has performed well against relevant benchmarks. As illustrated by the graphs below, shares of the Company’s common stock (including reinvestment of dividends) have returned significant value to stockholders over the long term relative to both the Company’s mREIT peers and other yield-focused investments.

Total Shareholder Return since 2014(2)

2017 Total Shareholder Return(2)

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Proxy Summary

STOCKHOLDER OUTREACH AND RESULTS OF 2017 SAY-ON-PAY VOTE

The Company is committed to ongoing engagement with both retail and institutional stockholders through a wide range of mediums. These engagement efforts have yielded meaningful feedback on a variety of topics, including the Company’s diversified investment strategy and its corporate governance, compensation and management structures.

Following the results of Annaly’s 2017 advisory resolution on executive compensation (commonly known as a “Say-on-Pay” vote), which received support from 69% of votes cast, the Company continued its multi-pronged outreach campaign to solicit feedback from key stakeholders on a number of issues, including the Manager’s executive compensation program and proposed compensation disclosure for 2018, board composition and refreshment and corporate social responsibility initiatives.

Stockholder Engagement Efforts in 2017
Outreach included approximately			Outreach included approximately			Management hosted meetings with investors representing

These stockholder engagement efforts generated significant feedback for both the Board and management and resulted in a number of enhancements to corporate governance and compensation practices and disclosures. Annaly’s stockholders have been extremely instrumental to, and supportive of, these governance and disclosure enhancements and the Company looks forward to continuing to find innovative ways to engage over the course of 2018 and beyond.

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STOCKHOLDER ENGAGEMENT

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Proxy Summary

ENHANCED DISCLOSURE ON THE MANAGER’S EXECUTIVE COMPENSATION PROGRAM

Over the last two years, the Company has engaged in extensive outreach to understand the information stockholders need in order to fully evaluate the Manager’s executive compensation program for purposes of making an informed Say-on-Pay vote. In response to this feedback, the Manager has provided the information below about the compensation it paid to the NEOs for 2017.

For additional information about the Manager, the management agreement and executive compensation, see “Certain Relationships and Related Party Transactions,” “Management Structure”, “Compensation Paid by the Manager to the Named Executive Officers” and “Compensation Discussion and Analysis.”

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Proxy Summary

THE MANAGER AND THE MANAGEMENT AGREEMENT

Over the past several years, the Manager has made significant investments in personnel corresponding to the diversification of its investment strategy into more people-intensive asset classes (including Residential Credit, Commercial Real Estate and Middle Market Lending assets), as well as to corporate infrastructure enhancements. These investments include the build out of teams for the Agency, Residential Credit, Commercial Real Estate and Middle Market Lending groups, and significant hires in business support functions, such as Risk Management, Legal and Compliance, Finance and Information Technology, among others.

The costs of these personnel expansions and improvements have been paid by the Manager rather than by the Company. Unlike a number of other externally-managed REITs, Annaly does not reimburse the Manager for any portion or subset of employment costs, all of which are borne by the Manager. An increase to these costs does not result in any increase to the management fee, which is a fixed percentage of stockholders’ equity as described above.

Despite the costs associated with the diversification of its investment strategy, the Manager has continued to operate the business in an efficient manner with appropriately scaled operating costs (including the management fee). As illustrated by the table below, Annaly’s average operating expense levels have remained significantly lower than both its internally- and externally-managed mREIT peers over the last six years.

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Proxy Summary

	2012		2013		2014		2015		2016		2017		Average
	1.45%		1.66%		1.61%		1.58%		1.65%		1.68%		1.61%
Internally-Managed Peers	2.71%		3.95%		3.92%		3.68%		2.14%		2.10%		3.08%
Externally-Managed Peers	2.38%		3.06%		3.55%		3.82%		4.36%		4.00%		3.53%
mREIT Index	2.33%		3.30%		3.62%		3.80%		3.53%		3.25%		3.30%

For additional information about the Manager, the management agreement and executive compensation, see “Certain Relationships and Related Party Transactions,” “Management Structure”, “Compensation Paid by the Manager to the Named Executive Officers” and “Compensation Discussion and Analysis.”

GOVERNANCE TIMELINE

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BOARD COMPOSITION AND REFRESHMENT

The Nominating/Corporate Governance Committee (the “NCG Committee”) of the Board seeks to achieve a balance of knowledge, experience and capability on the Board. Newer Directors offer fresh ideas and perspectives, while deeply experienced Directors bring extensive knowledge of the Company’s complex operations. On an annual basis, the NCG Committee evaluates the Board’s overall composition, including Director tenure and rigorously evaluates all Directors to ensure a continued match of their skill sets against the needs of the Company. This assessment also informs Board succession planning, and contributed to the appointment, effective January 1, 2018, of two new Independent Directors (Katie Beirne Fallon and Vicki Williams) with skills that complement the Company’s highly qualified Board. The table below summarizes key qualifications, skills, and attributes most relevant to the Directors’ service on the Board. For additional information about individual Director’s qualifications and experience, please see the Director biographies beginning on page20.

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Corporate Governance at Annaly

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Corporate Governance at Annaly

PROPOSAL 01		Election of Directors The Company has three classes of Directors. At the Annual Meeting, stockholders will vote to elect three Class I Directors (Wellington J. Denahan, Michael Haylon and Donnell A. Segalas), whose terms will expire at the annual meeting of stockholders in 2021 (“2021 Annual Meeting”), one Class III Director (Katie Beirne Fallon, who was appointed to the Board, effective January 1, 2018), whose term will expire at the annual meeting of stockholders in 2020 (“2020 Annual Meeting”), and one Class II Director (Vicki Williams, who was appointed to the Board, effective January 1, 2018), whose term will expire at the annual meeting of stockholders in 2019 (“2019 Annual Meeting”), each subject to the election and qualification of his or her successor or to his or her earlier death, resignation or removal. Other than Ms. Williams and Ms. Fallon, the terms of the other Class II and Class III Directors expire at the 2019 Annual Meeting and the 2020 Annual Meeting, respectively, and will not be voted upon at the Annual Meeting. The table below provides summary information about each of the Directors.
			The Board has nominated and recommends a voteFOReach of Wellington J. Denahan, Michael Haylon and Donnell A. Segalas as Directors to hold office until the 2021 Annual Meeting,FORKatie Beirne Fallon as a Director to hold office until the 2020 Annual Meeting, andFORVicki Williams as a Director to hold office until the 2019 Annual Meeting. Unless you specify a contrary choice, the persons named in the enclosed proxy will vote in favor of these nominees. In the event that these nominees should become unavailable for election due to any presently unforeseen reason, the persons named in the proxy will have the right to use their discretion to vote for a substitute.

Name

Age

Principal Occupation

Independent

Committees

Wellington J. Denahan

I54

57Former Executive Chairman

YesNo

January 1997

Compensation (Chair) ■PR

Annaly Capital Management, Inc.

Nominating/Corporate Governance ■Risk

Kevin G. Keyes

II

47

No

November 2012

None

Kevin P. Brady

II

59

Yes

January 1997

Audit (Chair)

Nominating/Corporate Governance

Risk

E. Wayne Nordberg

II

76

Yes

May 2004

Compensation

Nominating/Corporate Governance (Chair)

Jonathan D. Green

III

68

Yes

January 1997

Compensation

Risk (Chair)

John H. Schaefer

III

63

Yes

March 2013

Audit

Compensation

Risk

Francine J. Bovich

III

63

Yes

May 2014

Audit

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Class I Directors

Wellington J. Denahanis Chairman of the Board of Directors and Chief Executive Officer of Annaly. Ms. Denahan was appointed Chairman of the Board of Directors and Chief Executive Officer of Annaly in November 2012. Previously, Ms. Denahan was appointed to serve as Co-Chief Executive Officer of Annaly in October 2012. Ms. Denahan was elected in December 1996 to serve as Vice Chairman of the Board of Directors. Ms. Denahan was Annaly’s Chief Operating Officer from January 2006 to October 2012 and Chief Investment Officer from 2000 to November 2012. She was a co-founder of Annaly. Ms. Denahan has a B.A. in Finance from Florida State University.

The Board of Directors believes that Ms. Denahan’s qualifications include her significant oversight experience related to fixed income trading operations through years of serving as our Chief Operating Officer and Chief Investment Officer, her industry experience and expertise in the mortgage-backed securities markets, and her operational expertise.

Michael Haylon60was electedManaging DirectorYes

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CLASS I DIRECTORS

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CLASS II DIRECTORS

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Corporate Governance at Annaly

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CLASS III DIRECTORS

	Annaly Capital Management Inc. 2018 Proxy Statement	Table of Contents23

Table of ContentsClass III Directors

Corporate Governance at Annaly

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Corporate Governance at Annaly

INDEPENDENCE OF DIRECTORS

DIRECTOR NOMINATION PROCESS

DIRECTOR CRITERIA AND QUALIFICATIONS

The NCG Committee seeks to achieve a balance of knowledge, experience and capability on the Board and considers a wide range of factors when assessing potential Director nominees, including a candidate’s background, skills, expertise, diversity, accessibility and availability to serve effectively on the Board. All candidates should (i) possess the highest personal and professional ethics, integrity and values, exercise good business judgment and be committed to representing the long-term interests of the Company and its stockholders, and (ii) have an inquisitive and objective perspective, practical wisdom and mature judgment. It is expected that all Directors will have an understanding of the Company’s business and be willing to devote sufficient time and effort to carrying out their duties and responsibilities effectively.

BOARD REFRESHMENT AND DIVERSITY

On an annual basis, the NCG Committee evaluates the Board’s overall composition, including Director tenure, and rigorously evaluates all Directors to ensure a continued match of their skill sets against the needs of the Company. The NCG Committee seeks to achieve a balance between the deep knowledge and understanding of Annaly’s business that comes from longer-term service on the Board with the fresh ideas and perspectives that comes from having newer Directors on the Board. And although the NCG Committee does not have a formal diversity policy, it recognizes the importance of having a Board representing diverse backgrounds and a broad set of experiences at policy-making levels in business, finance, government, education, law and technology, and in other areas that are relevant to the Company’s business and its status as a public company.

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Corporate Governance at Annaly

The NCG Committee’s annual evaluation of the Board’s composition also informs Board succession planning, and contributed to the appointment, effective January 1, 2018, of two new Independent Directors (Ms. Fallon and Ms. Williams) with skills and backgrounds that complement the Company’s highly qualified Board. Ms. Fallon and Ms. Williams were respectively identified as potential Director nominees by the CEO and another member of senior management. Ms. Fallon and Ms. Williams were nominated by the NCG Committee after an extensive and careful search was conducted, and numerous other candidates proposed by Directors, members of management and professional search firms were considered.

STOCKHOLDER RECOMMENDATION OF DIRECTOR CANDIDATES

Stockholders who wish the NCG Committee to consider their recommendations for Director candidates should submit their recommendations in writing to the Chief Legal Officer and Secretary at the Company’s principal executive offices. Following verification of the stockholder status of persons proposing candidates, recommendations are aggregated and considered by the NCG Committee at a regularly scheduled or special meeting. If any materials are provided by a stockholder in connection with the nomination of a Director candidate, such materials are forwarded to the NCG Committee. Properly submitted recommendations by stockholders will receive the same consideration by the NCG Committee as other suggested nominees.

THE BOARD’S ROLE AND RESPONSIBILITIES

The Company is committed to maintaining a strong ethical culture and robust governance practices that benefit the long-term interests of stockholders, which include:

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Corporate Governance at Annaly

BOARD OVERSIGHT OF RISK

MANAGEMENT SUCCESSION PLANNING

The Board oversees and maintains a succession plan for the CEO and other senior executives. In carrying out this function, the Board endeavors to ensure that the Company’s management has the capabilities to cause the Company to operate in an efficient and business-like fashion in the event of a vacancy in senior management, whether anticipated or sudden.

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Corporate Governance at Annaly

BOARD COMMITMENT AND OVER-BOARDING POLICY

In order to provide sufficient time for informed participation in their Board responsibilities:

All Directors are currently in compliance with this policy. Directors are required to notify the Chairman of the Board and the chair of the NCG Committee in advance of accepting an invitation to serve on another public company board.

COMMUNICATIONS WITH THE BOARD

Stockholders and other persons interested in communicating with an individual Director (including the Lead Independent Director), the Independent Directors as a group, any committee of the Board or the Board as a whole, may do so by submitting such communication to:

Annaly Capital Management, Inc.
[Addressee]
1211 Avenue of the Americas
New York, NY 10036
Phone: 1-888-8 ANNALY
Facsimile: (212) 696-9809
Email: investor@annaly.com

The Legal Department reviews communications to the Directors and forwards those communications related to the duties and responsibilities of the Board to the appropriate parties. Certain items such as business solicitation or advertisements, product-related inquiries, junk mail or mass mailings, resumes or other job-related inquiries, spam and unduly hostile, threatening, potentially illegal or similarly unsuitable communications will not be forwarded.

Stockholders may Communicate with any Director, Including the Lead Independent Director

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Approval of Related Party Transactions

Each of Annaly’s Directors, Director nominees and executive officers is required to report all transactions with the Company in which they or an immediate family member had or will have a direct or indirect material interest in an annual disclosure questionnaire and on an on-going basis. Management reviews these annual questionnaires and requires interim reports and, if determined to be necessary, discusses any reported transactions with the entire Board. Other than as discussed in this section, there were no reported transactions for 2017 and there is no transaction currently pending for 2018. The Board does not, however, have a formal written policy for approval or ratification of such transactions, and all such transactions are evaluated on a case-by-case basis. If management believes a transaction could be a related party transaction or could raise particular conflict of interest issues, it will discuss it with legal counsel, and if necessary, the Board will form an Independent committee that has the right to engage its own legal and financial counsel to evaluate, approve or ratify the transaction.

28	Annaly Capital Management Inc. 2018 Proxy Statement

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Corporate Governance at Annaly

Management Agreement

The Company has entered into a management agreement (the “Management Agreement”) with the Manager. Management of the Company is conducted by the Manager through the authority delegated to it in the Management Agreement and pursuant to the policies established by Annaly’s Board. The Independent Directors periodically review the Management Agreement with the assistance of separate legal and financial advisors, who are selected and retained by the Independent Directors. The Management Agreement was effective as of July 1, 2013 and was amended in November 2014 and then amended and restated in April 2016, and may be further amended by agreement between the Manager and the Company.

The Management Agreement’s current term ends on December 31, 2018 and will automatically renew for successive two-year terms unless at least two-thirds of the Independent Directors or the holders of a majority of the outstanding shares of the Company’s common stock elect to terminate the agreement in their sole discretion and for any or no reason. At any time during the term or any renewal term, either party may deliver to the other party prior written notice of its intention to terminate the Management Agreement no less than one year prior to its proposed termination date or, but only in the event the Manager is the terminating party, such earlier date as determined by the Company in its sole discretion. There is no termination fee for a termination of the Management Agreement by either the Manager or the Company.

See also “Disclosure Enhancements” on page42 for a discussion of compensation paid by the Manager to the NEOs.

The Management Agreement provides that during its term and, in the event of termination of the Management Agreement by the Manager without cause, for a period of one year following such termination, the Manager will not, without the Company’s prior written consent, manage any REIT, which engages in the management of mortgage-backed securities in any geographical region in which the Company operates.

Pursuant to the terms of the Management Agreement, the Company pays the Manager a monthly management fee equal to 1/12th of 1.05% of the Company’s stockholders’ equity, as defined in the Management Agreement, for its management services. The Company incurred approximately $164.3 million in management fees under the Management Agreement during the year ended December 31, 2017.

The Manager

The Manager is a Delaware limited liability company and is indirectly owned by certain members of senior management. For additional information about the Manager, please see “Management Structure”, “Compensation Paid by the Manager to the Named Executive Officers” and “Compensation Discussion and Analysis.”

The management fee of Contents1.05% of stockholders’ equity (as defined in the Management Agreement) compares favorably to the industry average

	Annaly Capital Management Inc. 2018 Proxy Statement	Board Leadership Structure29 Wellington J. Denahan, one of our founders, is our Chairman of the Board

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Board Structure and Processes

BOARD LEADERSHIP STRUCTURE

The Board believes that whether to have the same person occupy the offices of Chairman of the Board and CEO should be decided by the Board, from time to time, in its business judgment after considering relevant factors, including the specific needs of the business and what is in the best interests of the Company at that point in time. Under the Corporate Governance Guidelines, the Independent Directors will annually select an Independent Director to serve as Lead Independent Director when the CEO and Chairman of the Board roles are combined or if the Chairman is not otherwise independent. Currently, Mr. Keyes serves as Chairman, CEO and President, while Mr. Green serves as Lead Independent Director.

The Board believes that the current leadership structure provides effective independent oversight of management, while allowing both the Board and management to benefit from Mr. Keyes’s day-to-day familiarity with the Company’s business.

The Lead Independent Director has significant authority and Chief Executive Officer. We believe that a combined Chairman of the Board of Directors and Chief Executive Officer position, together with independent Directors serving as members and chairs of each of our Board committees, and regularly scheduled sessionsresponsibilities

THE CHAIRMAN OF THE BOARD	◆	THE LEAD INDEPENDENT DIRECTOR
■Presides at full meetings of the Board and committees is the most appropriateAnnual Meeting of Stockholders ■Meets with the Lead Independent Director to receive feedback from executive sessions of Independent Directors ■Communicates with all Directors on key issues and concerns outside of Board leadership structure for usmeetings ■Advises on the selection of committee chairs ■Draws on his knowledge of the Company’s business, operations, industry and competitive developments in setting Board agendas ■Consults with the Lead Independent Director to ensure that Board agendas and information empower the Board to fulfill its responsibilities ■Has authority to call special meetings of the Board if necessary and otherwise updates Directors between meetings through one-on-one or group phone calls ■Authorizes the retention of advisors and consultants who report to management ■Presents the Company’s message and strategy to stockholders, employees and regulators		■Presides at this time. Experiencedall meetings of the Board in the absence of or at the request of the Chairman, including executive sessions of Independent Directors ■Facilitates communication between the Independent Directors and independent Directors, sitting on and chairing various committees, oversee our operations, risks, performance and business strategy. Our Board believes that for us, the combination of the Chairman of the Board and CEO ■Advises on the selection of Directorscommittee chairs ■Approves the quality, quantity and Chief Executive Officer positions takes advantagetimeliness of Ms. Denahan’s talentinformation sent to the Board ■Approves Board meeting agendas ■Approves Board meeting schedules to assure there is sufficient time for discussion of all agenda items ■Has authority to call meetings of the Independent Directors ■Authorizes the retention of outside advisors and knowledgeconsultants who report directly to the Board ■If requested by stockholders, ensures that he is available, when appropriate, for consultation and effectively combines the responsibilities for strategy development and executiondirect communication with management of day-to-day operations. We also believe it provides us with clear leadership lines and reduces the potential for confusion or duplication of efforts. Our Board believes that given its strong governance practices, including the requirement that a majority of its members be independent, the combination of these two roles, provide an appropriate balance among strategy development, operational execution and independent oversight. In addition, in February 2015, the independent Directors approved the creation of a lead independent Director role.major stockholders

The Board believes that its independent oversight function is further enhanced by its policy to hold regular executive sessions of the Independent Directors without management present and the fact that a majority of the Company’s Directors (and every member of the Board’s three key committees) is independent.

EXECUTIVE SESSIONS OF INDEPENDENT DIRECTORS

The Corporate Governance Guidelines require that the Board have at least two regularly scheduled executive sessions of Independent Directors each year. These executive sessions, which are designed to promote unfettered discussions among the Independent Directors, are presided over by the Lead Independent Director, or in his or her absence, the chair of the Compensation Committee. During 2017, the Independent Directors, without the participation of Board members who are members of management, held five executive sessions.

Lead Independent Director30 The lead independent Director: ● facilitates communication between the independent Directors and the Chairman of the Board ofDirectors; ● advises on the selection of committee chairs; ● presides at meetings of the Board of Directors in the absence of or at the request of the Chairmanof the Board of Directors; and ● makes himself or herself available for consultation or direct communication with major stockholders. The lead independent Director is appointed annually by the independent Directors and Jonathan Green has been appointed to serve as the initial lead independent Director. Board Committees, Charters and Policies Code of Business Conduct and Ethics We have adopted a Code of Business Conduct and Ethics, which sets forth the basic principles and guidelines for resolving various legal and ethical questions that may arise in the workplace and in the conduct of our business. This code is applicable to our Directors, officers and all employees of our subsidiaries as well as our Manager. Corporate Governance Guidelines We have adopted Corporate Governance Guidelines which, in conjunction with the charters and key practices of our Board committees, provide the framework for the governance of our company. Other Charters Our Compensation Committee, Audit Committee, Nominating/Corporate Governance Committee and Risk Committee have also adopted written charters which govern their conduct. Table of Contents Where You Can Find These Documents Our Code of Business Conduct and Ethics, Corporate Governance Guidelines, Compensation Committee Charter, Audit Committee Charter, Nominating/Corporate Governance Committee Charter and Risk Committee Charter are available on our website (www.annaly.com). We will provide copies of these documents free of charge to any stockholder who sends a written request to Investor Relations, Annaly Capital Management Inc., 1211 Avenue of the Americas, New York, New York 10036. Hedging Policy We have a policy prohibiting all Directors, officers and all employees of our subsidiaries as well as our Manager from engaging in any hedging transactions with respect to our equity securities held by them, which includes the purchase of any financial instrument (including forward contracts and zero cost collars) designed to hedge or offset any decrease in the market value of such equity securities. Compensation Committee We have a standing Compensation Committee. The members of our Compensation Committee are Donnell A. Segalas (Chair), Jonathan D. Green, E. Wayne Nordberg, and John H. Schaefer, each of whom is an independent Director within the meaning of the rules of the New York Stock Exchange. The Compensation Committee reviews the fees we pay to our Manager under our management agreement and administers our equity incentive plan and recommends changes to our equity incentive plan to our Board of Directors when appropriate. The Compensation Committee monitors from time to time any such payment and reserves the right to award compensation to the executives that may not qualify under Section 162(m) as deductible compensation. Section 162(m) of the Internal Revenue Code denies a tax deduction for compensation in excess of $1 million paid to its named executive officers unless the compensation is performance-based within the meaning of Section 162(m). Audit Committee We have a standing Audit Committee. The members of our Audit 2018 Proxy Statement

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Board Structure and Processes

BOARD AND COMMITTEE EVALUATIONS

The Lead Independent Director and the NCG Committee are responsible for overseeing an annual self-evaluation process for the Board. The self-evaluation process seeks to identify specific areas, if any, that need improvement or strengthening in order to increase the effectiveness of the Board as a whole and its members and committees. In 2018, the Board adopted an enhanced Board self-evaluation process that includes annual assessments of the full Board, each Board committee and individual Directors. Such assessments will be facilitated by an external evaluator on a periodic basis. In addition to these formal self-evaluations, the Board considers its performance as well as that of its members and committees on an ongoing basis and shares relevant feedback with management.

DIRECTOR ORIENTATION AND CONTINUING EDUCATION

The Board believes that Director orientation and continuing education is critical to the Board’s ability to fulfill its responsibilities in a dynamic and constantly evolving business environment. New Directors participate in a robust onboarding process, which includes extensive training materials and personal briefings by senior management on the Company’s strategic plans, financial statements, and key policies and practices. In addition, the Company encourages Directors to participate in external continuing director education programs, and the Company provides reimbursement for related expenses. Continuing director education is also provided during Board meetings and as stand-alone information sessions outside of meetings. In line with the Company’s commitment to continuing board education, in 2017, the Board became a Full Board Member of the NACD, which gives Directors access to an extensive menu of board education programs, along with research on governance trends and board practices.

GOVERNING DOCUMENTS

Code of Business Conduct and Ethics

The Board has adopted a Code of Business Conduct and Ethics (the “Code of Conduct”), which sets forth the basic principles and guidelines for resolving various legal and ethical questions that may arise in the workplace and in the conduct of business. This Code of Conduct is applicable to Annaly’s Directors, executive officers and employees, and is also a “code of ethics” as defined in Item 406(b) of Regulation S-K. The Company will make any legally required disclosures regarding amendments to, or waivers of, provisions of the Code of Conduct on the Company’s website.

Corporate Governance Guidelines

The Board has adopted Corporate Governance Guidelines that, in conjunction with the charters of the Board committees, provide the framework for governance of the Company.

Other Governance Policies

Annaly’s Directors, executive officers and employees are also subject to the Company’s other governance policies, including a Foreign Corrupt Practices Act and Anti-Bribery Compliance Policy, an Insider Trading Policy, and a Regulation FD Policy.

Where You Can Find the Code of Conduct, Corporate Governance Guidelines and Committee Charters

The Code of Conduct, Corporate Governance Guidelines, Compensation Committee Charter, Audit Committee Charter, NCG Committee Charter, Public Responsibility Committee Charter and Risk Committee Charter are available on Annaly’s website (www.annaly.com). The Company will provide copies of these documents free of charge to any stockholder who sends a written request to Investor Relations, Annaly Capital Management, Inc., 1211 Avenue of the Americas, New York, NY 10036.

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Board Structure and Processes

BOARD COMMITTEES

The Board has five standing committees: the Audit Committee, the Compensation Committee, the NCG Committee, the Risk Committee and the recently-formed Public Responsibility Committee.

As part of the Board’s continuing review of its Board committee structure and responsibilities, and in response to dialogue with stockholders, the Board created the new Public Responsibility Committee in late 2017. At the same time, the Board reorganized the membership of most of its other committees.

The Board created the new Public Responsibility Committee in late 2017

The table below shows the current membership of each Board committee and number of meetings of each committee held in 2017.

Director		Audit Committee		Compensation Committee		NCG Committee		PR Committee		Risk Committee
Francine J. Bovich								•
Kevin P. Brady						•				•
Wellington J. Denahan								•		•
Katie Beirne Fallon						•		•
Jonathan D. Green(1)				•						•
Michael Haylon		•								•
E. Wayne Nordberg		•		•		•
John H. Schaefer		•		•
Donnell A. Segalas						•		•
Vicki Williams		•		•
2017 Meetings:		6		2		4		0(2)		5

•  Member        Chairperson

(1)	Mr. Green serves as the Lead Independent Director. For more details, see page30.
(2)	The Public Responsibility (“PR”) Committee did not hold any meetings in 2017, as it was established in November 2017.

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AUDIT COMMITTEE

Committee Members: Kevin P. Brady (Chair), Francine J. Bovich, Michael Haylon and E. Wayne Nordberg John H. Schaefer. Each memberSchaefer Vicki Williams Number of our Audit Committee is an independent Director withinMeetings: 6

Key Responsibilities: ■Appoints the meaning of the rules of the New York Stock Exchange, and Mr. Brady has been designated as our Audit Committee’s financial expert. The Audit Committee recommends to our Board of Directors the engagement or discharge of independent registered public accountants,accounting firm and reviews its qualifications, performance and independence ■Reviews the plan and results of the auditing engagement with ourthe Chief Financial Officer and ourthe independent registered public accountants,accounting firm ■Oversees internal audit activities ■Oversees the quality and reviews with our Chief Financial Officerintegrity of financial statements and financial reporting process ■Oversees the scopeadequacy and natureeffectiveness of our internal auditing system. The activitiescontrol over financial reporting  ■Reviews and pre-approves the audit and permitted non-audit services and proposed fees of the independent registered public accounting firm ■Prepares the report of the Audit Committee are describedrequired by the rules of the SEC to be included in greater detail below under the caption “ReportProxy Statement

Each member of the Audit Committee.”Committee is financially literate and independent of the Company and management under the applicable rules of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the listing standards of the NYSE. The Board has designated Messrs. Brady and Haylon as “audit committee financial experts” under applicable SEC rules. Nominating/Corporate Governance Committee We have a standing Nominating/Corporate Governance Committee. The membersFor more information on the Audit Committee’s responsibilities and activities, see the “Board Oversight of our Nominating/Corporate GovernanceRisk” and “Report of the Audit Committee are ” sections of this Proxy Statement.

COMPENSATION COMMITTEE

Committee Members: Donnell A. Segalas (Chair) Jonathan D. Green E. Wayne Nordberg John H. Schaefer Vickie Williams Number of Meetings: 2

Key Responsibilities: ■Evaluates the performance of the Manager and the terms of the Management Agreement ■Reviews the fees payable to the Manager ■Administers the Company’s equity incentive plans and other equity compensation programs ■Reviews the form and amount of Director compensation ■Evaluates the performance of the Company’s officers ■Reviews and discusses with management the Compensation Discussion and Analysis and related disclosures as required by the SEC ■Prepares the report of the Compensation Committee required by the rules of the SEC to be included in the Proxy Statement

Each member of the Compensation Committee is independent of the Company and management under the listing standards of the NYSE. For more information on the Compensation Committee’s responsibilities and activities, see the “Compensation of Directors” and “Compensation Discussion and Analysis” sections of this Proxy Statement.

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NCG COMMITTEE

Committee Members: Francine J. Bovich (Chair), Kevin P. Brady and Katie Beirne Fallon E. Wayne Nordberg Donnell A. Segalas. EachSegalas Number of the members of our Nominating/Corporate Governance Committee meets the independence requirements of the New York Stock Exchange. Our Nominating/Corporate Governance Committee (i)Meetings: 4

Key Responsibilities: ■Develops and recommends criteria for the selection of new Directors, identifiesconsidering potential Board candidates ■Identifies and screens individuals qualified to become Board members, and recommends to the Board of Directors personscandidates for nomination for election or re-election to be nominated as Directors or to be electedthe Board and to fill vacancies on the Board of Directors; (ii) developsvacancies ■Develops and recommends to the Board of Directors a set of corporate governance principles; (iii) providesguidelines and recommends modifications as appropriate ■Provides oversight of the evaluation of the Board of Directors and management; and (iv) considersmanagement ■Considers other corporate governance matters, such as Director retirement policies, management succession plans for management and potential conflicts of interest of members of the Board of Directorsmembers and senior management, and makes recommendations for change,recommends changes as appropriate. Our appropriate

Table of Contents Nominating/Corporate Governance Committee will consider nominees recommended by our stockholders. These recommendations should be submitted in writing to our Secretary. Our Nominating/Corporate Governance Committee currently considers the following factors in making its recommendations to the Board of Directors: background, skills, expertise, accessibility and availability to serve effectively on the Board of Directors. Our Nominating/Corporate Governance Committee also conducts inquiries into the background and qualifications of potential candidates. Although the Nominating/Corporate Governance Committee does not have a formal diversity policy, it believes that diversity is an important factor in determining the composition of the Board of Directors. Additionally, the committee believes that it is critical to have a Board of Directors with diverse backgrounds in various areas as this contributes to our success and is in the best interests of our stockholders. Our Nominating/Corporate Governance Committee uses a variety of methods for identifying and evaluating nominees for Director. Our Nominating/Corporate Governance Committee regularly assesses the appropriate size of the Board of Directors, and whether any vacancies on the Board of Directors are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, our Nominating/Corporate Governance Committee considers various potential candidates for Director. Candidates may come to the attention of our Nominating/Corporate Governance Committee through current members of our Board of Directors, professional search firms, stockholders or other persons. These candidates are evaluated at regular or special meetings of our Nominating/Corporate Governance Committee and may be considered at any point during the year. As described above, our Nominating/Corporate Governance Committee considers properly submitted stockholder nominations for candidates for the Board of Directors. Following verification of the stockholder status of persons proposing candidates, recommendations are aggregated and considered by our Nominating/Corporate Governance Committee at a regularly scheduled or special meeting. If any materials are provided by a stockholder in connection with the nomination of a Director candidate, such materials are forwarded to our Nominating/Corporate Governance Committee. Our Nominating/Corporate Governance Committee also reviews materials provided by professional search firms or other parties in connection with a nominee who is not proposed by a stockholder. In evaluating such nominations, our Nominating/Corporate Governance Committee seeks to achieve a balance of knowledge, experience and capability on the Board of Directors. Risk Committee We have a standing Risk Committee. The members of our Risk Committee are Jonathan D. Green (Chair), Kevin P. Brady, Michael Haylon, and John H. Schaefer. Each member of the RiskNCG Committee is an independent Director within the meaning of the rulesCompany and management under the applicable listing standards of the New York Stock Exchange. The Risk NYSE. For more information on the NCG Committee’s responsibilities and activities, see the “Director Nomination Process,” “Director Criteria and Qualifications”, “Board Refreshment and Diversity” and “Stockholder Recommendation of Director Candidates” section of this Proxy Statement.

PUBLIC RESPONSIBILITY COMMITTEE
Committee assistsMembers: Jonathan D. Green (Chair) Francine J. Bovich Wellington J. Denahan Katie Beirne Fallon Donnell A. Segalas Number of Meetings: N/A(1)	Key Responsibilities: Assists the Board in theits oversight of our the Company’s items of public responsibility, including: ■corporate philanthropy ■social impact investments ■sustainability initiatives ■corporate culture and reputation ■public policy initiatives

For more information on the formation of the Public Responsibility Committee, see the “Stockholder Outreach and Results of 2017 Say-on-Pay Vote” section of this Proxy Statement.

RISK COMMITTEE

Committee Members: John H. Schaefer(Chair) Kevin P. Brady Wellington J. Denahan Jonathan D. Green Michael Haylon Number of Meetings: 5

Key Responsibilities: Assists the Board in its oversight of the Company’s:  ■risk governance structure; our structure ■risk management and risk assessment guidelines and policies regarding market, credit andcapital, liquidity and funding risk; our risk, tolerance,investment/market risk, credit risk, counterparty risk, operational risk, compliance, regulatory and legal risk and such other risks as necessary to fulfill the committee’s duties and responsibilities ■risk appetite, including risk toleranceappetite levels and capital targets and limits; and our capital, liquidity, and funding. limits

Board and Committee Meetings During 2014, our Board of Directors held fourteen meetings. During 2014, the Compensation Committee held three meetings, the Audit Committee held five meetings, the Nominating/Corporate Governance Committee held two meetings, andFor more information on the Risk Committee’s responsibilities and activities, see the “Board Oversight of Risk” section of this Proxy Statement.

(1)	The Public Responsibility Committee held fourdid not hold any meetings in 2017, as it was established in November 2017.

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DIRECTOR ATTENDANCE

During 2017, the Board held 13 meetings. Each Director attended at least 75% of the aggregate number of meetings held by the Board and each committee on which the Director served during the period he or she was on such committee.

The Company expects each member of the Board to attend the Annual Meeting. All of the Company’s then-Directors attended Annaly’s 2017 annual meeting of stockholders (the “2017 Annual Meeting”). Ms. Fallon and Ms. Williams were appointed as Directors effective January 1, 2018 and, therefore, did not attend the 2017 Annual Meeting.

COMPENSATION OF DIRECTORS

The Company compensates the Independent Directors. Any Director who is also an employee or owner of the Manager does not receive compensation for serving on the Board. The Compensation Committee is responsible for reviewing, and recommending to the Board, the form and amount of compensation paid to the Independent Directors.

The compensation elements paid to the Independent Directors for service on the Board and its committees for 2017 is set forth below:

Annual Compensation Element		Amount
Annual Cash Retainer		$100,000
Deferred Stock Unit (“DSU”) Grant		$135,000 in DSUs
Lead Independent Director Retainer		$30,000
Committee Member Retainer		$8,000 – Audit Committee
		$7,000 – Compensation Committee
		$7,000 – Risk Committee
		$5,000 – NCG Committee
Committee Chair Retainer(1)		$20,000 – Audit Committee
		$10,000 – Compensation Committee
		$10,000 – Risk Committee
		$10,000 – NCG Committee

(1)

Committee Chairs received Committee Chair Retainers in addition to, and not in lieu of, Committee Member Retainers. No retainers for service as a Member or Chair of the aggregate number of meetings held by our Board of Directors and 75% ofPublic Responsibility Committee were paid in 2017, as the aggregate number of meetings of each committee on which the Director served.did not meet during such year, having been established in November 2017.

Each DSU is equivalent in value to one share of the Company’s common stock. DSUs are granted on the date of the annual stockholder meeting and vest immediately. DSUs convert to shares of the Company’s common stock one year after the date of grant unless the Director elects to defer the settlement of the DSUs to a later date. DSUs do not have voting rights. DSUs pay dividend equivalents in either cash or additional DSUs at the election of the Director. The Independent Directors are also eligible to receive other stock-based awards under the Company’s equity incentive plan.

The Company reimburses the Directors for their reasonable out-of-pocket travel expenses incurred in connection with their attendance at full Board and committee meetings.

Director Stock Ownership Guideline

In 2016, the Board increased the stock ownership guideline for the Independent Directors to provide that each Independent Director should strive to own an amount of the Company’s common stock equal to five times the annual cash retainer. Shares counting toward the guideline include shares that are owned outright, DSUs and any other shares held in deferral accounts. To facilitate achievement of the guideline, the Board has adopted and implemented a “retention ratio” that requires Independent Directors to retain and hold 50% of the net profit shares from DSUs until the specified ownership level is achieved. As of March 31, 2017, all of the Independent Directors have met or are on their way to meeting their stock ownership guideline.

Table of Contents We require each member ofIn 2016, the Board ofincreased the stock ownership guideline for Independent Directors to attend our 5x the annual meeting of stockholders except for absences due to causes beyond the reasonable control of the Director. All of our Directors attended our 2014 annual meeting of stockholders. Meetings of Independent Directors Our corporate governance guidelines require that the Board have at least two regularly scheduled meetings each year for our independent Directors. These meetings,cash retainer, which are designed to promote unfettered discussions among our independent Directors, are presided over by our lead independent Director. In 2014, prior to the appointment of a lead independent Director, Kevin Brady, an independent Director, presided over these meetings. During 2014, our independent Directors, without the participation of Board members who are members of management, held two meetings.is currently $100,000