DEF: ARMOUR REIT Seeks Stockholder Approval for Key Proposals

Sentiment:

Definitive Proxy Statement 19 March 2026 4:14 PM

📋All filings for Armour Residential Reit, INC

ARMOUR Residential REIT, Inc. invites stockholders to its 2026 annual meeting to vote on director elections, auditor ratification, executive compensation, and a significant increase in its stock incentive plan shares.

Capital raiseThe company has entered into equity sales agreements for at-the-market (ATM) offerings of common stock, with the most recent amendment on January 28, 2026, increasing the number of shares that may be offered and sold by 15,000,000.In 2025, ARMOUR sold 19,890,218 common shares through BUCKLER as a sales agent, generating net proceeds of $351,128,491.From January 6, 2026, through March 16, 2026, an additional 11,820,056 common shares were sold for net proceeds of $215,673,322 through BUCKLER.The company also has an equity sales agreement for up to 6,550,000 shares of Series C Preferred Stock, though no sales were made under this agreement with BUCKLER in 2025.

Summary

Stockholders are invited to the 2026 annual meeting on April 30, 2026, at 8:00 a.m. (EDT), held virtually.
The Board of Directors unanimously recommends voting FOR the election of eight directors, the ratification of Deloitte & Touche LLP as independent accountants for fiscal year 2026, and the approval of 2025 executive compensation.
The Board also recommends voting 'ONE (1) YEAR' for the frequency of future stockholder advisory votes on executive compensation.
A key proposal is the approval of the Fourth Amended and Restated 2009 Stock Incentive Plan, which seeks to increase authorized shares by 1,000,000 to a total of 1,800,000 shares.
The record date for voting at the annual meeting is March 6, 2026, with 122,767,466 shares of common stock outstanding and entitled to vote.
The company is externally managed by ARMOUR Capital Management LP (ACM), and executive officers are compensated by ACM, with ARMOUR providing equity compensation.
In 2025, ARMOUR paid ACM $38.9 million in management fees (net of waived fees) and $2.8 million in reimbursable expenses.
The voluntary 40% Base Management Fee waiver by ACM, adjusted in February 2023, was terminated on December 22, 2025, effective for fees due after February 1, 2026.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing positively due to the significant improvement in financial performance metrics for 2025 and the company's commitment to strong corporate governance and long-term incentive alignment, despite the underperformance in TSR relative to peers.

Positives

The Board of Directors maintains strong corporate governance practices, including a majority independent board (63%), female representation (25%), and ethnic/racial diversity (13%).
All directors and executive officers are in compliance with stock ownership guidelines, aligning their interests with stockholders.
The company has a clear policy prohibiting hedging and pledging of its securities by officers and directors.
Net income for 2025 was $322,686,865, a significant improvement from losses in 2024 and 2023.
Total Economic Return for 2025 was 12.8%, reversing negative returns from the prior two years.
The company has consistently returned significant cash to stockholders through dividends (approximately $2.4 billion from 2010-2025) and share repurchases ($19.9 million in 2025).

Negatives

Total Shareholder Return (TSR) for 2025 was $73.74, underperforming the peer group TSR of $125.29.
One Form 4 report for director Robert C. Hain was delinquent in 2025, indicating a minor compliance lapse.

Risks

Cybersecurity risks are acknowledged, with potential for malware, viruses, hacking, and phishing attacks on systems, despite mitigation efforts like the Information Technology Steering Committee (ITSC) and Audit Committee oversight.
The company's reliance on its external manager, ACM, means it does not directly control executive cash compensation decisions, which are made by ACM.
The proposed increase of 1,000,000 shares for the stock incentive plan, while intended for retention, will result in further dilution of stockholder equity.

Future Outlook

The company anticipates that the proposed increase of 1,000,000 shares in the Fourth Amended Plan will provide sufficient equity awards for approximately three to seven years, depending on ARMOUR's performance and growth. The Board is committed to ongoing review and evaluation of executive compensation programs and will consider stockholder feedback from advisory votes.

Management Comments

Scott J. Ulm, CEO and Vice Chairman: "We look forward to the opportunity to interact with stockholders at the 2026 annual meeting. On behalf of our Board of Directors, I extend our appreciation for your continued support."
The Compensation Committee believes that the equity compensation program provides the appropriate balance to encourage long-term performance without excessive risk-taking.
The Board believes that the Fourth Amended Plan will allow the company to continue to promote the interests of the Company and its stockholders by attracting, retaining, and motivating key officers, directors, and other personnel.

Industry Context

StockSavvy.ai notes that ARMOUR Residential REIT operates in a highly competitive mortgage REIT industry, where attracting and retaining experienced professionals is crucial. The company's strategy of using an external manager (ACM) and relying on equity compensation for its executive officers is a common model in the REIT sector. The termination of the voluntary management fee waiver by ACM suggests a return to full contractual fees, which could impact the company's expense ratio relative to peers. The underperformance in Total Shareholder Return compared to its peer group highlights a challenge in a sector sensitive to interest rate fluctuations and market volatility.

Comparison to Industry Standards

ARMOUR's 2025 Total Shareholder Return of $73.74 significantly underperformed its peer group's average of $125.29, indicating a relative weakness in stock performance compared to companies like AGNC Investment Corp., Annaly Capital Management, Inc., Dynex Capital, Inc., Invesco Mortgage Capital, Inc., Orchid Island Capital, and Two Harbors Investment Corp.
The company's burn rate of 0.24% and adjusted burn rate of 0.60% in 2025 are presented as responsible and mindful of stockholder interests, suggesting an effort to manage dilution compared to industry norms, though specific peer comparisons for these metrics are not provided.
The 2025 Net Income of $322,686,865 and Total Economic Return of 12.8% represent a strong rebound from prior years' losses and negative returns, which could be seen as a positive outlier compared to some peers who may still be navigating challenging market conditions.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Chief Executive Officer	Co-Chief Executive Officer	Scott J. Ulm	2024-03-01	Transition from Co-Chief Executive Officer role.
Special Advisor to the Board (ex-officio, non-voting)	Co-Chief Executive Officer	Jeffrey J. Zimmer	2024-03-01	Stepped down from Co-Chief Executive Officer role.
Chief Financial Officer and Secretary	VP of Finance and Controller, Treasurer	Gordon M. Harper	2024-03-01	Promotion from VP of Finance and Controller, and Treasurer.
Co-Chief Investment Officer and Head of Risk Management	Director of Investment Strategies	Desmond E. Macauley	2024-03-01	Promotion from Director of Investment Strategies.
Co-Chief Investment Officer	Deputy Chief Investment Officer	Sergey Losyev	2024-03-01	Promotion from Deputy Chief Investment Officer.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Board Composition	The Board is comprised of eight members, with 63% being independent directors, 25% female representation, and 13% ethnic and racial diversity.	NA	Enhances independent oversight and brings diverse perspectives to decision-making.
Director Election Standard	Annual election of directors with a majority voting standard in uncontested elections and a Director Resignation Policy for nominees not receiving majority votes.	NA	Increases accountability of directors to stockholders.
Stock Ownership Guidelines	Established stock ownership targets for non-executive directors (3x annual base cash retainer, or $198,000) and executive officers (CEO $2M, CFO $1M, Co-CIOs $750K), to be achieved within five years.	NA	Aligns the financial interests of directors and executives with those of stockholders, promoting long-term value creation.
Prohibition on Hedging and Pledging	Policy prohibits officers and directors from engaging in hedging transactions or pledging company securities.	NA	Reduces speculative behavior and ensures full exposure to stock performance, further aligning interests with stockholders.
Clawback Policy	Adopted in October 2023, the policy allows for recovery of excess incentive compensation from current or former executive officers in the event of an accounting restatement due to material noncompliance.	2023-10-01	Strengthens accountability for financial reporting accuracy and aligns with SEC requirements, mitigating risks of misconduct.
Stock Incentive Plan Amendment	Proposal to approve the Fourth Amended and Restated 2009 Stock Incentive Plan, increasing authorized shares by 1,000,000 to 1,800,000, adjusting individual grant limits, and adding a clawback provision.	2026-04-30	Ensures continued ability to attract and retain talent through equity incentives, but also introduces potential for further stockholder dilution.

Related Party Transactions

Management Agreement with ARMOUR Capital Management LP (ACM): ACM manages ARMOUR's business affairs, providing executive and administrative personnel. Messrs. Ulm, Zimmer, Staton, and Bell (and their families) collectively own approximately 95% of ACM's limited partnership interests.
ACM Management Fees: ARMOUR pays ACM monthly management fees calculated as 1/12th of 1.5% of ARMOUR Gross Equity Raised up to $1 billion, and 0.75% of ARMOUR Gross Equity Raised in excess of $1 billion. In 2025, ARMOUR paid $38.9 million (net of waived fees) and $2.8 million in reimbursable expenses.
ACM Fee Waiver: ACM voluntarily waived 40% of the Base Management Fee from Q2 2020. This waiver was adjusted in February 2023 to $1,650,000 for Q1 2023 and $550,000 per month thereafter. The waiver was terminated on December 22, 2025, effective for fees due after February 1, 2026.
Sub-Management Agreement with Staton Bell Blank Check LLC (SBBC): SBBC provides services to ACM, receiving a sub-management fee of 25% of the net management fee earned by ACM. In 2025, ACM paid SBBC approximately $7.6 million. ACM owns approximately 99% of SBBC, while Messrs. Staton and Bell (and their families) own approximately 1%.
BUCKLER Securities LLC Broker-Dealer: A strategic joint venture to facilitate repurchase financing. ACM owners (Messrs. Ulm, Zimmer, Staton, Bell) hold 89.23% equity, and ARMOUR (through ATRS) holds 10.77%.
Subordinated Loan Commitments to BUCKLER: ARMOUR committed a $50,000,000 on-demand subordinated loan to BUCKLER effective February 28, 2025, and increased this commitment to $275,000,000 effective February 27, 2026. These commitments are collateralized by mortgage-backed and/or U.S. Treasury Securities.
Repurchase Agreements with BUCKLER: As of December 31, 2025, ARMOUR had approximately $8.4 billion in outstanding borrowings under repurchase agreements with BUCKLER, incurring $294 million in interest payments to BUCKLER in 2025. Approximately $8.3 billion of collateral was posted with BUCKLER.
Equity Sales Agreements with BUCKLER: ARMOUR has entered into ATM equity sales agreements with BUCKLER and other agents for common stock and Series C Preferred Stock. BUCKLER acts as a sales agent, earning compensation of up to 2.0% of the gross sales price. In 2025, 19,890,218 common shares were sold via BUCKLER for $351,128,491 net proceeds. From January 6, 2026, to March 16, 2026, an additional 11,820,056 common shares were sold for $215,673,322 net proceeds via BUCKLER.

Stakeholder Impact

Shareholders: Will be impacted by the outcome of the director elections, the approval of executive compensation, and the significant increase in authorized shares for the stock incentive plan, which could lead to further dilution. The termination of the management fee waiver will increase costs.
Employees (of ACM, serving ARMOUR): Executive officers and other key professionals will continue to be incentivized through equity awards under the proposed Fourth Amended Plan, which is crucial for retention and motivation.
Customers/Counterparties (of BUCKLER): The strategic joint venture with BUCKLER aims to provide more stable and potentially lower-priced repurchase agreement financing, which could benefit ARMOUR's operational efficiency.
Regulatory Authorities: The company's adherence to SEC rules, including the adoption of a clawback policy and disclosure of related-party transactions, demonstrates compliance with regulatory expectations.

Next Steps

Stockholders to vote on proposals at the annual meeting on April 30, 2026.
The Board will consider the outcome of the advisory vote on executive compensation frequency when determining future say-on-pay votes.
If approved, the Fourth Amended Plan will become effective on April 30, 2026, and will terminate on April 29, 2036.
The company will continue its investor outreach efforts to engage with stockholders on business, ESG concerns, and executive compensation practices.

Key Dates

Date	Description
2009-11-01	ARMOUR entered into a management agreement with ARRM (predecessor to ACM).
2009-11-06	ARMOUR and ARRM entered into a sub-management agreement with SBBC.
2009-11-01	Daniel C. Staton became Non-Executive Chairman of ARMOUR.
2009-11-01	Marc H. Bell became a director of ARMOUR.
2009-11-01	Robert C. Hain became a director of ARMOUR.
2009-11-01	John P. Hollihan, III became a director of ARMOUR.
2009-11-01	Stewart J. Paperin became a director of ARMOUR.
2009-11-01	Scott J. Ulm became Co-Chief Executive Officer, Co-Vice Chairman and Head of Risk Management of ARMOUR.
2011-01-01	Beginning of period for equity compensation awards.
2013-09-01	Carolyn Downey became a director of ARMOUR.
2019-07-01	Z. Jamie Behar became a director of ARMOUR.
2019-12-01	Non-Management Director Compensation and Deferral Program approved, effective January 1, 2020.
2020-01-01	Non-Management Director Compensation and Deferral Program became effective.
2020-01-29	Entered into equity sales agreement with BUCKLER and other agents for Series C Preferred Stock.
2020-07-01	Scott J. Ulm began receiving a salary from ACM at $150,000 per annum.
2021-01-01	January 2021 equity grants to non-management directors (2,500 shares each) and Messrs. Staton and Bell (12,650 shares each through ACM) approved.
2021-01-01	January 2021 equity grants to Mr. Ulm (35,850 shares) and Mr. Harper (2,000 shares) approved.
2023-02-01	February 2023 equity grants to non-management directors (8,000 shares each) approved.
2023-02-01	February 2023 equity grants to Mr. Ulm (56,000 shares) and Mr. Harper (16,800 shares) approved.
2023-02-14	ACM notified ARMOUR of adjustment to fee waiver rate ($1,650,000 for Q1 2023, $550,000 per month thereafter).
2023-07-26	Entered into the most recent equity sales agreement, increasing cumulative total shares of common stock registered for sale to 15,000,000 shares.
2023-09-29	Effective date of one-for-five reverse stock split.
2023-10-01	New clawback policy adopted to comply with SEC requirements.
2023-10-25	Sales Agreement amended to add StockBlock Securities LLC as a sales agent.
2024-03-01	Scott J. Ulm became Chief Executive Officer from mid-March 2024.
2024-05-15	Grants totaling 3,840 shares of stock reallocated to Mr. Harper.
2024-06-20	Sales Agreement amended to add BTIG, LLC as a sales agent.
2024-08-23	Sales Agreement amended to increase common stock shares by 25,000,000.
2024-09-20	Sales Agreement amended to add Janney Montgomery Scott LLC as a sales agent.
2025-02-13	Sales Agreement amended to increase common stock shares by 15,000,000.
2025-02-28	Company committed to provide an on-demand subordinated loan agreement to BUCKLER in the amount of $50,000,000, extending through February 28, 2028.
2025-04-01	April 2025 equity grants to Mr. Harper (60,000 shares), Mr. Macauley (30,000 shares), and Mr. Losyev (30,000 shares) approved.
2025-07-25	Sales Agreement amended to increase common stock shares by 9,500,000.
2025-12-01	December 2025 equity grants to non-management directors (12,857 shares each) approved.
2025-12-22	ACM notified ARMOUR of termination of the voluntary fee waiver, effective for fees due after February 1, 2026.
2025-12-31	End of fiscal year 2025.
2026-01-06	Start date for common share sales through BUCKLER in 2026.
2026-01-28	Sales Agreement further amended to increase common stock shares by 15,000,000, remove Janney as sales agent, and add Huntington Securities, Inc. as sales agent.
2026-02-27	Company committed to provide an on-demand subordinated loan agreement to BUCKLER in an amount up to $275,000,000, extending through February 27, 2029.
2026-03-06	Record date for the 2026 annual meeting of stockholders.
2026-03-16	End date for common share sales through BUCKLER in 2026 reported in the filing.
2026-03-19	Date of the proxy statement and mailing of Notice of Internet Availability of Proxy Materials.
2026-04-30	Date of the 2026 annual meeting of stockholders and proposed effective date of the Fourth Amended Plan if approved.
2026-10-20	Earliest date for notice of stockholder nominations or business for the 2027 annual meeting.
2026-11-19	Latest date (5:00 p.m. Eastern Time) for notice of stockholder nominations or business for the 2027 annual meeting, and deadline for stockholder proposals for inclusion in 2027 proxy materials.
2029-12-31	Expiration date of the current Management Agreement term.
2036-04-29	Proposed termination date of the Fourth Amended Plan if approved.

Recommendation

hold

The filing presents a mixed bag for investors. While the company demonstrated a strong rebound in Net Income and Total Economic Return in 2025, indicating improved operational performance, its Total Shareholder Return significantly lagged its peer group. The termination of the management fee waiver will increase costs, potentially impacting future profitability. The proposed increase in the stock incentive plan shares, while necessary for talent retention, also introduces further dilution risk. The extensive related-party transactions, while disclosed and approved by independent directors, warrant close monitoring for potential conflicts of interest. Given the improved financial results but ongoing challenges in relative stock performance and increased costs, a 'hold' recommendation is appropriate as the market assesses the long-term impact of these factors.

Keywords

REIT, Mortgage REIT, Proxy Statement, Corporate Governance, Executive Compensation, Stock Incentive Plan, Shareholder Meeting, Director Election, Auditor Ratification, Related Party Transactions, Cybersecurity, Equity Awards, Dividend Reinvestment, Share Repurchase

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