IVR-B Invesco Mortgage Capital Inc

Date and time

recommendation    

Monday, May 8, 2023,

at 2:00 p.m.,

Eastern Time

To elect seven (7) directors to the Board of Directors to hold office until the annual meeting of stockholders in 2024

Place

To hold an advisory vote to approve the company’s executive compensation

Kimpton Shane Hotel

1340 W Peachtree St NW

Atlanta, GA 30309

3

To hold an advisory vote on the frequency of holding future advisory votes on the company’s executive compensation

4

To appoint PricewaterhouseCoopers LLP as the company’s independent registered public accounting firm for the fiscal year ending December 31, 2023

Internet

Visit the web site

listed on your Notice

Telephone

Call the telephone

number listed on

your Notice

5

To consider and act upon such other business as may properly come before the meeting or any adjournment thereof

Mail

Sign, date and return
a requested proxy card

In person

Attend the Annual Meeting in Atlanta Georgia

Who can vote

Only holders of record of our common stock on March 9, 2023 are entitled to notice of and to attend and vote at the Annual Meeting and any adjournment or postponement thereof. Beginning on March 21, 2023, we mailed a Notice of Internet Availability of Proxy Materials (“Notice”) containing instructions on how to access this Proxy Statement and our Annual Report via the Internet to eligible stockholders.

By order of the Board of Directors,

Tina Carew,

Company Secretary

March 21, 2023

Proxy statement summary 

Proposal No. 1 – Election of directors

Information about Director Nominees

Corporate governance

Information about the Board and its committees

Board of directors and committees

Board meetings and annual meeting of stockholders

The Audit Committee

The Compensation Committee

The Nomination and Corporate Governance Committee

Director compensation

Information about the Executive Officers of the company

Executive compensation

Compensation discussion and analysis

Compensation Committee report

Compensation committee interlocks and insider participation

Certain relationships and related transactions

Related person transaction policy

Delinquent Section 16(a) Reports

Security ownership of principal stockholders

Security ownership of management

Our Board of Directors currently has nine directors, each of whom is serving a term of office that continues until the Annual Meeting in 2023, or until such director’s successor has been duly elected and qualified, or such director is removed from office or such director’s office is otherwise earlier vacated. Edward J. Hardin and James R. Lientz, Jr. each determined not to seek re-election this year. Katharine W. Kelley joined the Board in March 2023 and was initially identified as a candidate by an external search firm. The Board believes the addition of her perspective and skill set will enrich the Board.

The Board has nominated John S. Day, Carolyn B. Handlon, Katharine W. Kelley, Don H. Liu, Dennis P. Lockhart, Gregory G. McGreevey and Beth A. Zayicek for election as directors of the company for a term ending at the 2024 Annual Meeting, or until such director’s successor has been duly elected and qualified, or such director is removed from office. Further information regarding the nominees is shown on the following pages. Each nominee has indicated to the company that the nominee would serve if elected. We do not anticipate that any of our director nominees would be unable to stand for election, but if that were to happen, the Board may reduce the size of the Board, designate a substitute or leave a vacancy unfilled. If a substitute is designated, proxies voting on the original director candidate will be cast for the substituted candidate.

FOR

Recommendation of the Board

The Board unanimously recommends a vote “FOR” the election to the Board of each of the director nominees.

Vote required: This proposal requires the affirmative vote of a majority of votes cast at the Annual Meeting.

John S. Day

Non-executive director

Age                    Tenure

75                       14 Years

Current Committees:

•  Audit (Chair)

•  Compensation

•  Nomination and Corporate Governance

Qualifications:

•  Financial Services/Capital Markets

•  Mortgage Industry/MBS

•  Executive Leadership

•  Risk Management

•  Accounting and Financial Reporting

•  Corporate Governance

•  Other Public Company Board Experience

John S. Day

John S. Day has served as a director and as Chair of the Audit Committee since 2009. Mr. Day was previously with Deloitte & Touche LLP from 2002 until his retirement in 2005. Prior to joining Deloitte & Touche LLP, Mr. Day was with Arthur Andersen LLP from 1976 to 2002. Mr. Day received a B.A. degree from the University of North Carolina and an M.B.A. from Harvard Business School.

If elected, Mr. Day will serve as Chair of the Board.

Director qualifications

•  Accounting and financial reporting expertise: Mr. Day has amassed extensive experience in finance and accounting, having served for nearly three decades at two of the world’s largest accounting firms. In keeping with his experience, Mr. Day is recognized by the Board as an audit committee financial expert under the Securities and Exchange Commission (“SEC”) rules.

•  Public and private company board experience: Mr. Day served on the board of Lenbrook Square Foundation, Inc., from 2007 to 2019, where he was Chairman of the Board from 2012 to 2014 and was a member of the Finance and Governance and Nominating Committees. From September 2007 to December 2011, Mr. Day served on the board of directors of Force Protection, Inc., where he was the Chairman of the Audit Committee, and from 2010 to 2014, Mr. Day served on the board of Edens Investment Limited Partnership, where he was Chairman of the Audit Committee.

Carolyn B. Handlon

Non-executive director

Age                    Tenure

65                       6 Years

Current Committees:

•  Audit

•  Compensation (Chair)

•  Nomination and Corporate Governance

Qualifications:

•  Financial Services/Capital Markets

•  Mortgage Industry/MBS

•  Executive Leadership

•  Risk Management

•  Accounting and Financial Reporting

•  Corporate Governance

•  Other Public Company Board Experience

Carolyn B. Handlon

Carolyn B. Handlon has served as a director since 2017 and as Chair of the Compensation Committee since 2018. Ms. Handlon retired from Marriott International (“Marriott”) in April 2022 where she held several leadership roles during her 35 years with the company, including serving as EVP & Global Treasurer for the last 17 years with areas of responsibility including financial strategy, financial risk management, global capital markets, hotel finance and mortgage banking. In that role, Ms. Handlon oversaw the financial health and strategy of Marriott, global investing and deal evaluations, ensuring the financial integrity of global investment opportunities. Prior to joining Marriott in 1987, Ms. Handlon worked for the Overseas Private Investment Corporation and Continental Illinois Bank. She holds a B.A. from Virginia Polytechnic Institute and State University and a M.B.A. from Indiana University.

If elected, Ms. Handlon will serve as Chair of the Audit Committee.

Director qualifications

•  Financial services/capital markets and accounting and financial reporting expertise: Ms. Handlon was one of the key leaders at Marriott in the structuring of business combinations, spin-offs and joint ventures. Her record of successfully navigating turbulent economic recessions and capital market crises, preserving liquidity and financial stability for Marriott demonstrates her financial acumen and expertise. Ms. Handlon is recognized by the Board as an audit committee financial expert under the SEC rules.

•  Public and private company board experience: Ms. Handlon has served on the board of Science Applications International Corporation (“SAIC”) since 2022 and is a member of SAIC’s Audit and Nominating/Governance Committees. She was appointed to the board of directors of Apple Hospitality REIT, Inc. effective March 1, 2023. She is a member of the Economic Club of Washington, National Association of Corporate Directors and Women Corporate Directors.

Katharine W. Kelley

Non-executive director

Age                    Tenure

59                       < 1 Year

Committees:

•  Audit

•  Compensation

•  Nomination and Corporate Governance

Qualifications:

•  Mortgage Industry/MBS

•  Executive Leadership

•  Risk Management

Katharine W. Kelley

Katharine W. Kelley is Owner and President of Green Street Properties, an Atlanta-based real estate development and consulting firm focused on creating urban infill, mixed-use properties. From 2016-2018, Ms. Kelley served as Executive Vice President-Development for Newport, an international private equity and real estate development firm. Prior to that, she served as Managing Director at Jamestown, an international real estate private equity firm, and Senior Vice President-Development at Post Apartment Development, a multifamily and mixed-use real estate development firm. Ms. Kelley received a Bachelor of Arts degree from the University of North Carolina at Chapel Hill, a Master of Science degree in Real Estate Development from Columbia University, and a Master of Business Administration from Harvard University.

Director qualifications

•  Mortgage industry and executive leadership: Ms. Kelley has over 30 years of experience in urban infill, mixed-use and residential development, leading the development of more than $2 billion of properties while serving in senior positions, contributing multifamily residential and commercial real estate expertise to our board. She is nationally recognized for creative, catalytic development, product innovation and leadership of mixed-use projects.

Don H. Liu

Non-executive director

Age                    Tenure

61                       1 Year

Current Committees:

•  Audit

•  Compensation

•  Nomination and Corporate Governance

Qualifications:

•  Executive leadership

•  Risk Management

•  Accounting and Financial Reporting

•  Corporate Governance

•  Technical–Government, legal and regulatory

Don H. Liu

Don H. Liu has served as a director since February 2022. Mr. Liu is the Executive Vice President, Chief Legal and Risk Officer and Corporate Secretary of Target Corporation (“Target”). Prior to joining Target in 2016, Mr. Liu served in diverse leadership roles working across multiple business sectors and functional areas at Xerox as Executive Vice President, General Counsel and Corporate Secretary; Toll Brothers as Senior Vice President, General Counsel and Chief Compliance Officer; IKON Office Solutions as Corporate Compliance Officer and Chair of IKON Diversity Council; and Aetna U.S. Healthcare as Deputy Chief Legal Officer. Prior to becoming in-house counsel, he served as an associate at two New York City law firms specializing in securities and mergers and acquisitions. Mr. Liu received his B.A. degree from Haverford College and earned his J.D. from Columbia University School of Law.

If elected, Mr. Liu will serve as Chair of the Nomination and Corporate Governance Committee.

Director qualifications

•  Corporate governance, executive leadership and technical expertise: Mr. Liu serves on the Executive Leadership Team at Target and is accountable for all of Target’s legal, government affairs, risks and reputation, compliance, ethics and corporate security functions. Throughout his career, he has advised his board of directors on global strategic matters such as mergers and acquisitions, business development and risk management. He has been a consistent key player in the development of Diversity, Equity and Inclusion and Environmental, Social and Governance (“ESG”) strategies and governance protocols for his companies, including the establishment and becoming the first chair of the IKON Diversity Council and the formation of the Target board’s ESG and related governance framework.

Dennis P. Lockhart

Non-executive director

Age                    Tenure

76                       6 Years

Current Committees:

•  Audit

•  Compensation

•  Nomination and Corporate Governance

Qualifications:

•  Financial Services/Capital Markets

•  Executive Leadership

•  Risk Management

•  Accounting and Financial Reporting

•  Other Public Company Board Experience

Dennis P. Lockhart

Dennis P. Lockhart has served as a director since 2017. Mr. Lockhart is the immediate past President and Chief Executive Officer of the Federal Reserve Bank of Atlanta, a position he held from 2007 until his retirement in 2017. In addition, he served on the U.S. Federal Reserve’s chief monetary policy body, the Federal Open Market Committee, from 2007 to 2017. He currently serves as a director of The Beneficient Company Group, Prime Revenue Inc., and American Virtual Cloud Technologies, Inc. Mr. Lockhart is a Distinguished Professor of Practice at the Sam Nunn School of International Affairs at the Georgia Institute of Technology. Mr. Lockhart served on the faculty of Georgetown University’s School of Foreign Service from 2003 to 2007, and as an adjunct professor at Johns Hopkins University’s School of Advanced International Studies from 2002 to 2007. During his academic service, Mr. Lockhart was Chairman of the Small Enterprise Assistance Funds. Earlier, he was a managing partner at Zephyr Management LP, president of Heller International Group, Chairman of the advisory committee of the U.S. Export-Import Bank, and held various positions with Citigroup (formerly Citicorp/Citibank). Mr. Lockhart received a B.A. from Stanford University, a Master’s in international economics and American foreign policy from Johns Hopkins University, and an honorary doctoral degree from Georgia State University. Mr. Lockhart served as an officer in the U.S. Marine Corps Reserve from 1968 to 1974.

If elected, Mr. Lockhart will serve as Chair of the Compensation Committee.

Director qualifications

•  Executive leadership, financial services/capital markets and economic policy experience: Mr. Lockhart brings a wealth of finance and economic policy experience to the Board given his 10 years of service with the U.S. Federal Reserve Bank system, including monetary policy and economic regulation. Importantly, Mr. Lockhart also has more than 30 years of experience in the private financial sector which greatly benefits the Board.

•  Civic and policy organization experience: Mr. Lockhart also brings valuable perspectives and experience to the Board given his service on various non-profit organizations, governance and advisory boards.

Gregory G. McGreevey

Director

Age                    Tenure

60                       7 Years

Qualifications:

•  Financial Services/Capital Markets

•  Mortgage Industry/MBS

•  Executive Leadership

•  Risk Management

Gregory G. McGreevey

Gregory G. McGreevey has served as a director since 2016. Mr. McGreevey has served as Senior Managing Director, Investments, of Invesco since 2017, with responsibilities including certain of Invesco’s global equities investment teams, US and Canadian equities, equity trading, private credit, private markets, global fixed income, product development, Global Performance Measurement and Risk Group and investment administration. Previously, he was chief executive officer of Invesco Fixed Income from 2011 to 2017. Prior to joining Invesco, he was president of Hartford Investment Management Co. and executive vice president and chief investment officer of The Hartford Financial Services Group, Inc. from 2008 to 2011. From 1997 to 2008, Mr. McGreevey served as vice chairman and executive vice president of ING Investment Management – Americas Region, as well as business head and chief investment officer for ING’s North American proprietary investments and chief executive officer of ING Institutional Markets. Before joining ING, Mr. McGreevey was president and chief investment officer of Laughlin Asset Management and president and chief operating officer of both Laughlin Educational Services and Laughlin Analytics, Inc. He is a Chartered Financial Analyst. Mr. McGreevey earned a B.B.A. from the University of Portland and an M.B.A. from Portland State University.

Director qualifications

•  Executive leadership, financial services/capital markets and mortgage industry/ MBS experience: Mr. McGreevey has nearly 30 years of investment management industry experience, including as an investment professional and in a series of executive management positions. Mr. McGreevey’s deep experience with the fixed income and institutional investment products and his leadership of Invesco’s business in these areas provides the Board with great insight into issues facing the industry.

Beth A. Zayicek

Director

Age                    Tenure

42                       2 Years

Qualifications:

•  Financial Services/Capital Markets

•  Mortgage Industry/MBS

•  Executive leadership

•  Risk Management

•  Other Public Company Board Experience

Beth A. Zayicek

Ms. Zayicek has served as a director since 2021. Ms. Zayicek has served as the Chief Operating Officer of Private Markets for Invesco since 2019 and has worked in Invesco Real Estate, the real estate investment center of Invesco, since 2008. She is a member of Invesco Real Estate’s Global Executive Committee and Asia Investment Committee. Ms. Zayicek previously served as Invesco Real Estate’s Chief Operating Officer from 2017 to 2019 and senior director of investment analytics from 2013 to 2016. She has also served on Invesco Real Estate’s portfolio management and acquisition teams and as a member of its North American Investment Committee. Prior to joining Invesco Real Estate, Ms. Zayicek served as a member of the corporate and investment banking analyst program and real estate private equity group at KeyBank. Ms. Zayicek also currently serves as Chief Operating Officer and a director of Invesco Real Estate Income Trust Inc. Ms. Zayicek earned a B.S. in Management with a concentration in Finance from Case Western Reserve University.

Director qualifications

•  Executive leadership, financial services/capital markets and mortgage industry/ MBS experience: Ms. Zayicek has extensive experience in the real estate and private markets industries. Her in-depth understanding of the asset management business as it specifically relates to real estate that she has obtained throughout her career and particularly as serving as the Chief Operating Officer of Invesco Private Markets is an invaluable resource for the company and the Board.

Edward J. Hardin

Chair, Non-executive director

Age                    Tenure

80                       9 Years

Committees:

•  Audit

•  Compensation

•  Nomination and Corporate Governance

Qualifications:

•  Executive Leadership

•  Risk Management

•  Accounting and Financial Reporting

•  Corporate Governance

•  Other Public Company Board Experience

•  Technical--Government, legal and regulatory

Edward J. Hardin

Edward J. Hardin has served as our Chair since 2017 and as a director since 2014. Mr. Hardin is a partner of the law firm of Smith, Gambrell & Russell LLP (“SGR”) and was a partner of the law firm of Rogers & Hardin LLP from its formation in 1976 until its combination with SGR in 2022. Mr. Hardin received a B.A. degree from Wesleyan University and a J.D. degree from Vanderbilt University.

Director qualifications

•  Executive leadership, corporate governance, legal expertise: Mr. Hardin has spent over 40 years as a corporate and business lawyer in a leading Atlanta law firm, including service as a member of its executive committee. Mr. Hardin has extensive experience with legal and business issues facing public companies in a variety of industries. Mr. Hardin’s broad background is a valuable asset to the Board’s functioning in many of the decisions it is called upon to make.

•  Public company board experience: Mr. Hardin has served more than 40 years on boards of directors of other public companies. Mr. Hardin serves on the board of Grady Memorial Hospital Corporation where he is Chair of the Compensation Committee. Mr. Hardin is Chairman Emeritus of the board of Gateway Center LLC, a homeless services provider, Vice Chairman of the board of Georgia Works! Inc., a residential transitional work training program, Co-Chairman of the Regional Commission on Homelessness, a public private partnership of eight local governments and community leaders, Chairman of the Fulton County Board of Health, Fulton County, Georgia and President of the Georgia Legal Services Foundation which supports indigent legal services.

James R. Lientz, Jr.

Non-executive director

Age                     Tenure

79                        11 Years

Committees:

•  Audit

•  Compensation

•  Nomination and Corporate Governance (Chair)

Qualifications:

•  Financial Services/Capital Markets

•  Executive Leadership

•  Risk Management

•  Corporate Governance

•  Other Public Company Board Experience

James R. Lientz, Jr.

James R. Lientz, Jr. has served as a director since 2012 and as Chair of the Nomination and Corporate Governance Committee since 2018. Mr. Lientz has more than 35 years of experience in the banking industry and nearly eight in government service. Mr. Lientz served as President of C&S Bank of South Carolina from 1990 to 1992, President of Nationsbank of Georgia from 1993 to 1996 and President, Mid-South Division, of Bank of America from 1996 to 2001. His public sector work was as Chief Operating Officer of the State of Georgia from 2003 to 2010. Mr. Lientz is currently a partner of Safe Harbor Consulting, LLC. Mr. Lientz received a B.S. degree from Georgia Institute of Technology in 1965 and an M.B.A. from Georgia State University in 1971.

Director qualifications

•  Executive leadership, industry experience and public sector leadership: Mr. Lientz has more than 35 years of broad experience in financial-corporate management, specifically within the financial services industry. In addition, he brings to our board a perspective on leadership developed in the private and public sectors, having served as the first Chief Operating Officer for the State of Georgia for seven years. Mr. Lientz’s depth and breadth of board and executive experience uniquely qualify him to provide guidance to our company.

•  Public and private company board experience: Mr. Lientz serves as a director of the following private companies: Diversified Trust Company (Chair) since 2015, Georgia Banking Company (Chair) since 2010 and First Chatham Bank since 2022. He also serves as an advisory director of iFolio. Mr. Lientz is a former director of Georgia Power Company, Brand Holdings, Inc., BlueCross BlueShield of Georgia, MidCountry Financial Corp, and NDC Health.

The Board engages an independent external advisor specializing in corporate governance to coordinate the Board’s self assessment by its members. The advisor provides each director with a questionnaire and then performs one-on-one confidential interviews with directors.

The advisor prepares and presents a report in person to the Board, which discusses the findings of the advisor based upon its reviews. The report also discusses governance trends which the Board may want to take into consideration.

The Board then discusses the evaluation to determine what actions, if any, could further enhance the operations of the Board and its committees.

The Nomination and Corporate Governance Committee reviews and updates its criteria for prospective directors based on succession planning for directors, to fill gaps in skill sets among current directors and to address new or evolving needs of the company. The committee utilizes recommendations from directors and an independent search firm to determine candidates for consideration.

We are committed to having our Board represent diverse backgrounds and a wide range of professional experience in areas that are relevant to our business and status as a public company. Our Corporate Governance Guidelines require that the Board seek out highly qualified candidates of diverse gender, race and ethnicity and take into account other factors that promote principles of diversity and ensure that women and underrepresented candidates are included in each pool of candidates from which the Board nominees are chosen.

Candidates meet with members of the Nomination and Corporate Governance Committee, the Board Chair and the other Board members who assess candidates based on several factors, including whether the nominee has skills that will meet the needs of the company’s objectives and will bring diversity of thought, perspective, experience and background to our Board.

Due diligence is conducted, including soliciting feedback on potential candidates from persons outside the company. Qualified candidates are presented to the Board of Directors.

•  Financial services/capital markets

•  Mortgage industry/MBS

•  Executive leadership

•  Corporate governance

•  Technical - government, legal and regulatory

•  Risk management

•  Accounting and financial reporting

•  Gender and racial diversity

•  Other public company board experience

Corporate governance

Corporate governance guidelines

The Board has adopted Corporate Governance Guidelines (“Guidelines”) which are available in the corporate governance section of the company’s website at www.invescomortgagecapital.com (the “company’s website”). The information on the company’s website is not intended to form a part of, and is not incorporated by reference into, this Proxy Statement. The Guidelines set forth the practices the Board follows with respect to, among other matters, the composition of the Board, director responsibilities, Board committees, director access to officers and independent advisors, director compensation and the performance evaluation of the Board.

The Board is elected by stockholders to oversee our management team and to seek to assure that the long-term interests of the stockholders are being served.

The company has chosen to separate the chief executive officer and Board Chair positions.

Board leadership structure

As described in the Guidelines, our business is conducted day-to-day by our officers and our manager, under the direction of the chief executive officer and the oversight of the Board, to enhance the long-term value of the company for its stockholders. The Board is elected by the stockholders to oversee the officers of the company and our manager and to seek to assure that the long-term interests of the stockholders are being served. In light of these differences in the fundamental roles of the Board and management, the company has chosen to separate the chief executive officer and Board Chair positions. The Board believes separation of these roles: (i) allows the Board to more effectively monitor and evaluate objectively the performance of the chief executive officer, such that the chief executive officer is more likely to be held accountable for his performance, (ii) allows the non-executive Chair to control the Board’s agenda and information flow, and (iii) creates an atmosphere in which other directors are more likely to challenge the chief executive officer and other members of our senior management team. For these reasons, the company believes that this Board leadership structure is currently the most appropriate structure for the company. Nevertheless, the Board may reassess the appropriateness of the existing structure at any time, including following changes in Board composition, in management, or in the character of the company’s business and operations.

Code of conduct

Our Board of Directors has established a code of ethics that applies to our officers, directors and independent contractors and to our manager’s officers, directors and personnel when such individuals are acting for or on our behalf (the “code of conduct”). Among other matters, our code of conduct is designed to deter wrongdoing and to promote:

•  honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

•  full, fair, accurate, timely and understandable disclosure in our SEC reports and other public communications;

•  compliance with applicable governmental laws, rules and regulations;

•  prompt internal reporting of violations of the code of conduct to appropriate persons identified in the code of conduct; and

•  accountability for adherence to the code of conduct.

Any waiver of the code of conduct for our executive officers or directors may be made only by our Board of Directors or one of our Board committees. The code of conduct is posted on the company’s website. We intend to satisfy the disclosure requirement regarding any amendment to, or a waiver of, a provision of the code of conduct by posting such information on the company’s website.

Members:

John S. Day (Chair)

Carolyn B. Handlon

Edward J. Hardin

Katharine W. Kelley¹

James R. Lientz, Jr.

Don H. Liu

Dennis P. Lockhart

Independence:

Each member of the

committee is independent

under SEC and NYSE rules and financially literate

Audit Committee

Financial Experts:

Mr. Day and Ms. Handlon

qualify under SEC rules

and regulations

Meetings held in 2022:

4

The Audit Committee

Under its charter, the committee:

•  is comprised of at least three members of the Board and each is “independent” under the NYSE and SEC rules and is also “financially literate,” as defined under NYSE rules;

•  members are appointed and removed by the Board;

•  is required to meet at least quarterly;

•  periodically meets with the internal auditor and the independent auditor in separate executive sessions without members of senior management present;

•  has the authority to retain independent advisors, at the company’s expense, whenever it deems appropriate to fulfill its duties; and

•  reports to the Board regularly.

The committee’s charter is available on the company’s website. The charter sets forth the committee’s responsibilities, which include assisting the Board in fulfilling its responsibility to oversee (i) the company’s financial reporting, auditing and internal control activities, including the integrity of the company’s financial statements, (ii) the independent auditor’s qualifications and independence, (iii) the performance of the company’s internal audit function and independent auditor, and (iv) the company’s compliance with legal and regulatory requirements.

Ms. Kelley joined the Audit Committee on March 1, 2023.

Members:

John S. Day

Carolyn B. Handlon (Chair)

Edward J. Hardin

Katharine W. Kelley¹

James R. Lientz, Jr.

Don H. Liu

Dennis P. Lockhart

The Compensation Committee

Under its charter, the committee:

•  is comprised of at least three members of the Board, each of whom is “independent” of the company under the NYSE and SEC rules;

•  members are appointed and removed by the Board; and

•  has the authority to retain independent advisors, at the company’s expense, whenever it deems appropriate to fulfill its duties, including any compensation consulting firm.

Independence:

Each member of the

committee is independent

under SEC and NYSE rules

Meetings held in 2022:

2

The committee meets at least annually to review and make recommendations to the Board on the compensation of the company’s non-executive directors.

Members:

John S. Day

Carolyn B. Handlon

Edward J. Hardin

Katharine W. Kelley¹

James R. Lientz, Jr. (Chair)

Don H. Liu

Dennis P. Lockhart

The Nomination and Corporate Governance Committee

Under its charter, the committee:

•  is comprised of at least three members of the Board, each of whom is “independent” of the company under the NYSE and SEC rules;

•  members are appointed and removed by the Board; and

•  has the authority to retain independent advisors, at the company’s expense, whenever it deems appropriate to fulfill its duties.

Independence:

Each member of the

committee is independent

under SEC and NYSE rules

Meetings held in 2022:

4

Ms. Kelley joined the Compensation Committee and the Nomination and Corporate Governance Committee on March 1, 2023.

Audit Committee

Chair fee

On June 3, 2022, the Company effected a 1-for-10 reverse stock split of its common stock. Shares owned are reported on a post-split basis.

Ms. Kelley did not join the Board until March 1, 2023.

Based on current compensation levels, it is anticipated that Mr. Liu will attain the share ownership requirement within the time period required by the policy.

The following table sets forth the compensation paid to our non-executive directors during 2022.

Fees earned or paid

in cash ($)²

John S. Day

Carolyn Handlon

Edward J. Hardin

James R. Lientz, Jr.

Don H. Liu

Dennis Lockhart

Ms. Kelley did not join the Board until March 1, 2023.

Includes the annual base fee and, as applicable, additional Chair of the Board fee and commitee Chair fees.

Reflects (i) with respect to Mr. Liu, a grant as of March 15, 2022 of an equity award in the amount of 1,002 shares of common stock (on a post-split basis) reflecting his service for the period February to May 2022; and (ii) with respect to each non-executive directors (including Mr. Liu), the grant as of May 15, 2022 of an annual equity award in the amount of 5,428 shares of common stock (on a post-split basis) for the service period May 2022 to May 2023. The equity awards vest on the anniversary of the date of grant. The values in the table reflect the full grant date fair value of such equity awards, determined in accordance with U.S. generally accepted accounting principles. As of December 31, 2022, (i) with respect to Mr. Liu, 6,430 shares were unvested; and (ii) with respect to each of the non-executive directors other than Mr. Liu, 5,428 shares were unvested. Dividends on unvested equity awards are paid at the same time and rate as shares of our common stock.

John M. Anzalone

Mr. Anzalone has served as our Chief Executive Officer since 2017. Prior to becoming CEO, Mr. Anzalone served as our Chief Investment Officer since the company’s inception in 2009. Mr. Anzalone joined Invesco’s Fixed Income Division (“IFI”) in 2002, where he is a Senior Portfolio Manager and Head of Structured Securities Portfolio Management. Mr. Anzalone also serves as a member of IFI’s Investment Strategy team, which is responsible for providing investment views for risk positioning and asset allocation across the platform. As the Head of the Structured Securities group, he is responsible for the application of investment strategy across portfolios consistent with client investment objectives and guidelines. Additionally, the team is responsible for analyzing and implementing investment actions in the residential, commercial mortgage-backed and asset-backed securities sectors. Mr. Anzalone began his investment career in 1992 at Union Trust. In 1994, he moved to AgriBank, FCB, where he served as a Senior Trader for six years. Mr. Anzalone is also a former employee of Advantus Capital Management where he was a Senior Trader responsible for trading mortgage-backed, asset-backed and commercial mortgage securities. Mr. Anzalone received a B.A. degree in Economics from Hobart College and an M.B.A. from the Simon School at the University of Rochester. Mr. Anzalone is a Chartered Financial Analyst.

John M. Anzalone

Chief Executive Officer

Kevin M. Collins

Mr. Collins has served as our President since 2017. Previously, he served as our Executive Vice President Commercial Mortgage Credit from March 2017 to October 2017 and as a Managing Director and our Head of Commercial Mortgage Credit from 2011 to March 2017. He is also the Head of Commercial Mortgage Credit for Invesco Fixed Income. His primary responsibilities include evaluating, selecting and positioning commercial mortgage-backed securities, commercial real estate loans and other real estate debt investments across Invesco-managed institutional and retail fixed income funds, including the company. Prior to joining Invesco in 2007, Mr. Collins structured various capital funding strategies, including bond securitizations and secured lending facilities, for banks and specialty finance companies during his tenure at Credit Suisse First Boston. Mr. Collins began his career in the New York-based structured finance advisory services practice at Ernst & Young, focusing on structured product cash flow modeling and collateral analytics. Mr. Collins graduated with a B.S. in accounting from Florida State University and earned an M.B.A. from the Kellogg School of Management at Northwestern University.

Kevin M. Collins

President

Brian P. Norris

Mr. Norris has served as our Chief Investment Officer since 2019. Prior to his role as CIO, Mr. Norris served as Director, Portfolio Management since 2011 and has worked on behalf of the company since its inception in 2009. He is also a Senior Portfolio Manager on Invesco’s Structured Securities team, a position he has held since 2014. Mr. Norris joined Invesco in 2001, serving as a portfolio manager from 2006 to 2014 and an account manager from 2001 to 2006. Prior to joining Invesco, Mr. Norris worked as a securities trader with Todd Investment Advisors. He earned a BS degree in Business Administration with a concentration in finance from the University of Louisville and is a Chartered Financial Analyst (CFA) charterholder.

Brian P. Norris

Chief Investment Officer

R. Lee Phegley, Jr.

Mr. Phegley has served as our Chief Financial Officer since 2014. Mr. Phegley also serves as the Chief Financial Officer for Invesco Real Estate Income Trust Inc., a non-traded REIT also managed by our manager. Having joined Invesco in 2006, Mr. Phegley also provides financial leadership to our institutional, alternatives and digital wealth businesses. Prior to joining Invesco, Mr. Phegley spent nine years in public accounting with Arthur Anderson LLP and KPMG LLP. Mr. Phegley received a B.A. degree from Baylor University and an M.S. degree in Accountancy from the University of Houston and is a Certified Public Accountant.

David B. Lyle

Mr. Lyle has served as our Chief Operating Officer since 2017. Previously, he served as our Executive Vice President Residential Credit from March 2017 to October 2017 and as our Head of Residential Mortgage Credit from 2011 to March 2017. He is also the Head of Residential Mortgage-Backed Securities (“RMBS”) Credit for Invesco Fixed Income. His primary responsibilities include the evaluation and oversight of investments in Non-Agency RMBS, credit risk transfer securities, and residential whole loans for institutional and retail fixed income funds, including the company. Mr. Lyle has over 20 years of experience in the RMBS market. Prior to joining Invesco in 2006, Mr. Lyle spent three years at Friedman Billings Ramsey, where he was a Vice President in the Investment Banking ABS group. In this role, he participated in the financing, transaction management and analytics functions of the business. He also spent two years as an Analyst in the mortgage finance group at Wachovia Securities. Mr. Lyle graduated with a bachelor of engineering degree from Vanderbilt University.

David B. Lyle

Chief Operating Officer

Tenure

Mario L. Clemente

Mr. Clemente has served as the Head of Structured Investments at Invesco since 2016. He previously served as the co-head of the Investment Solutions group within Invesco Fixed Income from 2014 to 2016. Mr. Clemente joined Invesco in 2014. Prior to joining Invesco, he ran his own consulting firm from 2008 to 2014. Mr. Clemente entered the industry in 1995 and has held various senior investment banking roles with Citi, Natixis and Bank of America. He earned an undergraduate degree in finance and international banking from Hofstra University and an M.B.A in finance from the Stern School of Business at New York University.

Our management agreement

We are externally managed by Invesco Advisers, Inc., a wholly-owned subsidiary of Invesco Ltd., pursuant to a management agreement, which provides that our manager is responsible for managing our affairs. As highlighted below, we have no employees. Our executive officers are employees of our manager (or one of its affiliates) and such individuals are engaged in additional capacities for our manager (or one of its affiliates). Our executive officers do not receive compensation from us, nor do we reimburse our manager for any of their compensation. Instead, our manager and its affiliates use the proceeds from the management fee, in part, to pay compensation to its officers and personnel, including our executive officers. No specific portion of the management fee is allocated to the compensation of our executive officers because these individuals manage or are associated with multiple Invesco products, and research and investment strategies employed may impact a number of products for which these individuals are responsible. As such, compensation for our executive officers reflects performance across all the products managed by them, and decisions are based on the principles and factors described below in Overview of our manager’s compensation program and philosophy. While each of these principles and factors is considered by our manager in making compensation decisions, our manager does not attempt to rank or assign relative weight to any factor but rather applies its judgment in considering them in their entirety.

•  All of our executive officers are employees of our manager (or one of its affiliates) and are engaged in additional capacities for our manager (or one of its affiliates).

•  Our manager is responsible for the compensation of our executive officers and other employees of our manager who provide services to the company. We do not pay any cash or equity compensation to our executive officers, do not provide pension benefits, perquisites or other personal benefits, and have no employment agreements or arrangements to make any payments upon termination from service as an officer.

•  Our manager receives a management fee equal to 1.50% of our stockholders’ equity, subject to the exclusion of one-time events due to changes in U.S. GAAP and certain non-cash items upon approval of a majority of our independent directors, which is used, in part, to pay the compensation of our manager’s employees who provide services to the company. However, no specific portion of the management fee is allocated to the compensation of our executive officers.

For additional information about our management agreement, see Certain Relationships and Related Transactions.

Overview of our manager’s compensation program and philosophy

Our manager makes all decisions relating to the compensation of our executive officers based on such factors as our manager may determine are appropriate. However, our manager consults with the members of the Compensation Committee concerning the compensation policy of our manager that is applied to the individuals that serve as our executive officers. Our manager has structured its compensation programs to support its multi-year strategic objectives and the behaviors and discipline that generate strong performance for its clients and shareholders by:

•  Balancing pay-for-performance with economic outcomes;

•  Reinforcing its commercial viability by closely linking rewards to company, business unit and individual results and performance;

•  Attracting, recognizing and retaining talent by ensuring a meaningful mix of cash and deferred compensation; and

•  Discouraging excessive risk-taking that would have a material adverse impact on its clients, shareholders or company.

•  Investment performance

•  Qualitative assessment

Measure investment performance against indicators of client success on products for which the investment team is responsible

•  Financial results

Provide appropriate linkage to our manager’s financial results related to the investment team

•  Balance

Balance pay for investment performance with economic outcomes

Ensure sufficient flexibility for management to exercise judgment over bonus funding outcomes, to ensure results make sense for Invesco and the team/individual

•  Risk management

Design plans that do not create risks that are reasonably likely to have a material adverse impact on Invesco

 Fixed compensation

Base salary

Cash

•  Provides fixed pay for the performance of day-to-day job duties

•  Sole source of fixed cash compensation

•  Based on knowledge, skills, experience, and scope of responsibility

•  Small portion of total annual compensation

•  Generally, remains static unless there is a promotion or adjustment needed due to industry trends

•  Recognizes current year achievement of goals and objectives

•  Aligns with company, business unit and individual performance

•  Reflects assessment of annual investment performance and financial results of the investment products for which the investment team is responsible

•  Along with annual cash bonus, provides a competitive annual incentive opportunity

•  Aligns with Invesco client and shareholder interests

•  Encourages retention by vesting in equal annual increments over time

•  Reflects assessment of annual investment performance and financial results of the investment products for which the investment team is responsible

•  Award is denominated in Invesco’s product fund offerings and settled in cash

•  Recognizes potential for future contributions to Invesco’s long-term strategic objectives

•  Aligns with Invesco client and shareholder interests and encourages retention by vesting in annual increments over time

•  Reflects assessment of company and individual performance

Our executive officers’ annual incentive compensation is funded from an annual incentive pool which is the source of incentive compensation of all employees of Invesco and its affiliates. Each year, the Invesco Compensation Committee examines Invesco’s progress on multiple operating measures, Invesco’s progress toward achieving its long-term strategic objectives and other factors, including pre-cash bonus operating income of Invesco (PCBOI), in setting the size of the incentive pool. The Invesco Compensation Committee uses a range of 34%-48% of Invesco PCBOI in setting the Invesco-wide incentive pool, though it maintains flexibility to go outside either end of this range in circumstances that it deems exceptional. Our executive officers are paid incentive compensation out of the Invesco-wide incentive pool taking into account the compensation principles set forth above.

For 2022, our executive officers’ compensation, in the aggregate, was apportioned 29% to fixed compensation and 71% to variable or incentive compensation.

2022 executive officer fixed versus incentive compensation

Executive officer stock ownership policy

In order to encourage the alignment of interests between our executive officers and our stockholders, we maintain an Executive Officer Stock Ownership Policy, which was amended in 2022 to reflect the Company’s reverse stock split in June 2022. The policy requires that, within five years of the date of the later of (i) the effective date of the policy or (ii) such executive officer’s first appointment:

•  the chief executive officer achieve an ownership level of at least 7,000 shares, and

•  the chief financial officer, the president, chief investment officer, and chief operating officer achieve an ownership level of at least 3,500 shares.

All of our executive officers are expected to attain their respective ownership requirements within the time period prescribed by the policy.

Insider trading policy

We maintain an insider trading policy, which prohibits short selling, dealing in publicly- traded options, pledging, hedging (see below) or monetization transactions in our securities.

Hedging policy

As part of our insider trading policy, we have a hedging policy in place for all of our directors, officers, employees and any of their respective (i) family members that reside in the same household as the individual (including a child away at college), (ii) anyone else who lives in the household, and (iii) family members outside of the household whose transactions in the company’s securities are directed by such individual or are subject to such individual’s influence or control and (iv) any entities, including any corporations, partnerships or trusts that the individual influences or controls. Our policy prohibits hedging or monetization transactions, such as zero-cost collars and forward sale contracts, involving our securities; however, limited exceptions are allowed. To date, no exceptions have been made.

Certain risks related to our management fee

Because our management fee is calculated as a percent of stockholders’ equity, subject to specified adjustments, we believe the structure of the management fee does not create an incentive for management to take excessive or unnecessary risks and reduces the risk of conflicts of interests with our manager. Stockholders’ equity as the basis for the calculation does not result in leveraged pay-out curves, steep pay-out cliffs or set unreasonable goals and thresholds, each of which can promote excessive and unnecessary risks. In addition, the management fee may not be increased or revised without the approval of our independent directors.

Consideration of prior advisory vote

Our Compensation Committee noted the significant support received in the 2022 advisory vote on executive compensation (approximately 94% of votes cast), and therefore it has determined that no changes were advisable based on the outcome of that vote.

Compensation Committee report

The Compensation Committee of the company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

Respectfully submitted by the Compensation Committee:

Carolyn B. Handlon (Chair)

John S. Day

Edward J. Hardin

James R. Lientz, Jr.

Don H. Liu

Dennis P. Lockhart

Katharine W. Kelley¹

1.  Ms. Kelley was not a member of the Compensation Committee during the period covered by this report. She joined the Compensation Committee on March 1, 2023.

Total

Relationship to our manager

In 2009, we entered into a management agreement with our manager pursuant to which our manager provides the day-to-day management of our operations. The management agreement requires our manager to conduct our business in conformity with the policies and the investment guidelines that are approved and monitored by our Board of Directors. Our manager is entitled to receive a management fee from us. The management fee is equal to 1.5% of the company’s stockholders’ equity per annum, subject to specified adjustments, which is calculated and payable quarterly in arrears. We are also obligated to reimburse certain operating expenses related to the company incurred by our manager, including directors and officers insurance, accounting services, auditing and tax services, legal services, filing fees and miscellaneous general and administrative costs. The management agreement renews for one-year terms unless terminated by either us or our manager. Our manager is entitled to receive a termination fee from us, under certain circumstances.

Grants of equity compensation to our manager, its personnel and its affiliates

We adopted the Invesco Mortgage Capital Inc. 2009 Equity Incentive Plan as amended and restated (the “Plan”) to provide incentive compensation to attract and retain qualified directors, officers, advisors, consultants and other personnel, including our manager and its affiliates and personnel of our manager. The Plan provides for grants of stock options, restricted stock, phantom shares, dividend equivalent rights and other equity-based awards.

Amount and nature

of beneficial

ownership¹

Percent

of class (%)

1. Except as described otherwise in the footnotes to this table, each beneficial owner in the table has sole voting and dispositive power with regard to the shares beneficially owned by such owner.

2. Information obtained solely by reference to the Schedule 13G/A filed with the SEC on January 26, 2023 by BlackRock, Inc. which reflects sole voting power with respect to 6,184,881 shares of common stock and sole dispositive power with respect to 6,253,156 shares of common stock.

3. Information obtained solely by reference to the Schedule 13G/A filed with the SEC on February 9, 2023 by The Vanguard Group, which reflects shared voting power with respect to 22,653 common shares of common stock, sole dispositive power with respect to 3,842,659 shares of common stock, and shared dispositive power with respect to 52,909 shares of common stock.

John M. Anzalone

Mario Clemente

Kevin M. Collins

John S. Day¹

Carolyn B. Handlon

Edward J. Hardin

James R. Lientz, Jr.

Don H. Liu

Dennis P. Lockhart

David B. Lyle²

Gregory G. McGreevey

Brian Norris³

Richard Lee Phegley, Jr.

Beth A. Zayicek

Katharine W. Kelley⁴

All directors and executive officers as a group (15 persons)

Mr. Day also owns 5,300 shares of the company’s 7.75% Fixed-to-Floating Series B Cumulative Redeemable Preferred Stock.

Includes 54 shares held by the spouse of Mr. Lyle.

Includes 82 shares held by the spouse of Mr. Norris.

Ms. Kelley joined the Board effective March 1, 2023.

We are externally managed and do not have any employees. Our executive officers are employees of our manager and do not receive compensation from us.

See Executive Compensation for additional detail on our manager’s compensation programs related to our executive officers.

General

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) enables our stockholders to vote to approve, on an advisory (nonbinding) basis, the compensation of our named executive officers as disclosed in this Proxy Statement in accordance with the SEC rules. This proposal, commonly known as a “say-on-pay” proposal, is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy Statement.

Notwithstanding that we do not pay our executive officers compensation, we are required by the SEC to seek an advisory vote from our stockholders to approve the compensation of our executive officers as disclosed in this proxy statement. Accordingly, we will ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:

“RESOLVED, that the company’s stockholders approve, on an advisory (non-binding) basis, the compensation of the named executive officers, as disclosed in the company’s Proxy Statement for the 2023 Annual Meeting of Stockholders pursuant to the Securities and Exchange Commission’s compensation disclosure rules, including the Compensation Discussion and Analysis, the compensation tables and related narrative discussion.”

The say-on-pay vote is advisory, and therefore not binding on the company, our Board of Directors or the Compensation Committee. Our Board of Directors and our Compensation Committee value the opinions of our stockholders and to the extent there is any significant vote against the named executive officer compensation as disclosed in this Proxy Statement, we will consider our stockholders’ concerns and evaluate whether any actions are necessary to address those concerns. At the 2022 Annual Meeting of Stockholders, 94% of the votes cast were in favor of the advisory proposal to approve our named executive officers’ compensation. Under the Board’s current policy, stockholders are given an opportunity annually to cast an advisory vote on this topic, and our next vote is expected to be conducted at the 2024 annual meeting of stockholders.

Recommendation of the Board

The Board unanimously recommends a vote “FOR” the approval of the compensation of our named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the SEC.

Vote required: This proposal requires the affirmative vote of a majority of votes cast at the Annual Meeting.

General

The Dodd-Frank Act also enables our stockholders to indicate, on an advisory (non-binding) basis, how frequently we should seek an advisory vote on the compensation of our named executive officers, as we do above in Proposal No. 2. By voting on this Proposal No. 3, stockholders may indicate whether they would prefer an advisory vote on named executive officer compensation once every one, two, or three years.

After consideration of this Proposal, our Board of Directors has determined that an advisory vote on executive compensation that occurs once every year is the most appropriate alternative for the company at this time, and therefore our Board of Directors recommends that you vote for an annual interval for the advisory vote on executive compensation.

You may cast your vote on your preferred voting frequency by choosing the option of one year, two years, three years or abstain from voting when you vote in response to the resolution set forth below.

“RESOLVED, that the option of once every one year, two years, or three years that receives the highest number of votes cast for this resolution will be determined to be the preferred frequency with which the Company is to hold a stockholder vote to approve the compensation of the named executive officers, as disclosed pursuant to the Securities and Exchange Commission’s compensation disclosure rules.”

The option of one year, two years or three years that receives the highest number of votes cast by stockholders will be the preferred frequency with which the company is to hold the advisory vote by the stockholders on executive compensation. However, because this vote is advisory and not binding on the Board of Directors or the company, the Board may decide that it is in the best interests of our stockholders and the company to hold an advisory vote on executive compensation more or less frequently than the option approved by our stockholders.

EVERY

ONE YEAR

Recommendation of the Board

The Board unanimously recommends a vote for the option of every “ONE YEAR” as the frequency with which stockholders are to provide an advisory vote on executive compensation.

Vote required: The voting requirements for this proposal are described in the Questions and answers about voting your common shares section of this Proxy Statement.

Proposal

General

During and for the fiscal year ended December 31, 2022, PwC audited and rendered opinions on the financial statements of the company and certain of its subsidiaries. PwC also rendered an opinion on the company’s internal control over financial reporting as of December 31, 2022. See Fees Paid to Independent Registered Public Accounting Firm below. Representatives of PwC are expected to be present at the Annual Meeting and will have the opportunity to make a statement if they desire to do so. It is also expected that they will be available to respond to appropriate questions.

          Year ($ in thousands)        

Audit fees¹

Audit-related fees²

Tax fees³

All other fees⁴

Total fees

Audit fees consist of fees and related expenses billed for the audit of the consolidated financial statements and services provided by PwC in connection with statutory and regulatory filings or engagements. The audit fees include fees and expenses in connection with quarterly and annual reports and the issuance of consents by PwC to be named in, and the use of their audit report in, our registration statements.

Audit-related fees consist of fees and expenses billed for assurance and related professional services.

Tax fees consist of professional services related to federal and state tax compliance and tax planning. PwC did not perform any tax services.

All other fees consist of any fees and expenses for professional services not included in one of the other categories. All other fees for 2021 and 2022 consisted entirely of a subscription for a license for financial statement disclosure research.

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