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Published on November 10, 2010
November
10, 2010
VIA EDGAR AND OVERNIGHT
DELIVERY
Mr. Kevin
Woody
Division
of Corporation Finance
Securities
and Exchange Commission
100 F
Street, N.E.
Washington,
D.C. 20549
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Re:
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MFA
Financial, Inc.
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Form
10-K for the year ended December 31,
2009
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Filed
February 11, 2010
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Definitive
Proxy Statement on Schedule 14A
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Filed
April 6, 2010
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File
No. 001-13991
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Dear
Mr. Woody:
On behalf
of MFA Financial, Inc. (the "Company"), set forth
below is the response of the Company to the comment of the staff of the Division
of Corporation Finance (the "Staff") of the
Securities and Exchange Commission (the "Commission") received
by letter dated November 4, 2010 (the "November 4 Letter"),
with respect to the Company's Form 10-K for the year ended December 31, 2009
(the "Form
10-K") and Definitive Proxy Statement on Schedule 14A filed on April 6,
2010 (the "2010 Proxy
Statement"). The text of the comment and the Company's
response thereto is set forth below:
We
note your response to comment 8 in our letter dated September 14,
2010. The disclosure referenced in your response does not fully
describe the factors taken into consideration and how the committee's assessment
of those factors resulted in the actual incentive compensation amounts
rewarded. For example, you state that the committee took into account
effective contributions by Messrs. Gorin and Freydberg. Please
further describe those contributions that the committee viewed as
effective. With respect to Messrs, Knutson and Korth, you state that
the committee also took into consideration the individual performance of each
officer, but do not elaborate on the specific aspects of the officers'
individual performances that led to the compensation decision that it
did. Furthermore, we note your disclosure that the Bonus Pool was
adjusted upwards by 15% based on the committee's assessment, but you do not
explain why the committee chose to allocate the pool in the manner that it did
among the named executive officers. Please provide us with the more
detailed discussion and confirm that you will provide similar disclosure in
future filings.
In
response to this comment, we note that the comment raises three separate
questions.
The first question asks for
additional disclosure of the specific contributions made by Messrs. Gorin and
Freydberg.
Mr. Kevin
Woody
November
10, 2010
Page
2
The second question asks for
additional disclosure with respect to the specific aspects of the performance of
Messrs. Knutson and Korth that led to the decision of the Compensation
Committee.
The third question asks for
additional disclosure relating to why the Compensation Committee chose to
allocate the bonus pool in the manner that it did among the three named
executive officers.
With
regard to the first and
third questions, we note
that the text in the 2010 Proxy Statement immediately following the table on
page 26 under the caption "EXECUTIVE COMPENSATION − Compensation Discussion and
Analysis − Elements of Executive Compensation − Incentive Compensation" states
that:
"Based
upon the subjective evaluation of the relative leadership and performance of the
Senior Executives (individually and collectively) and MFA's 2009 financial
performance, the Compensation Committee determined to allocate the Bonus Pool as
set forth in the table above. This allocation reflected the view of
the Compensation Committee that the Senior Executives functioned effectively as
a senior management team, under the overall leadership of Mr. Zimmerman, in his
capacity as Chief Executive Officer and Chairman of the Board, with effective
contributions by Mr. Gorin, in his capacity as President and Chief Financial
Officer, and Mr. Freydberg, in his capacity as Executive Vice President and
Chief Investment and Administrative Officer."
This text
is communicating that the allocation among the three executives was based on a
subjective evaluation of the individual contributions made by the executives as
part of the over-all leadership team.
In future
proxy statements, in the event that the bonus pool is again allocated based on a
subjective evaluation of individual leadership contributions, we would propose
to supplement the disclosure to identify any specific contributions made by the
executives that were taken into account by the Compensation
Committee. An example of how future disclosure might vary from the
2010 Proxy Statement disclosure is illustrated in the highlighted changes
reflected in the following paragraph:
This
allocation reflected the view of the Compensation Committee that the Senior
Executives functioned effectively as a senior management team, under the overall
leadership of Mr. Zimmerman, in his capacity as Chief Executive Officer and
Chairman of the Board, with effective contributions by Mr. Gorin, in his
capacity as President and Chief Financial Officer, and Mr. Freydberg, in his
capacity as Executive Vice President and Chief Investment and Administrative
Officer. The specific assessments taken into account by the
Compensation Committee in making this allocation with regard to (i) Mr.
Zimmerman included [__________], (ii) Mr. Gorin included [__________] and (iii)
Mr. Freydberg included [__________].
With
regard to the second
question, which asks for additional
disclosure with respect to the specific aspects of the performance of Messrs.
Knutson and Korth that led to the decision of the Compensation Committee, we
note that we note that the text in the 2010 Proxy Statement immediately
following the table on page 26 under the caption "EXECUTIVE COMPENSATION −
Compensation Discussion and Analysis − Elements of Executive Compensation −
Incentive Compensation" states that:
"Annual
incentive compensation for Messrs. Knutson and Korth is determined at the
discretion of the Compensation Committee based upon its subjective assessment
and evaluation of MFA's annual performance and the annual performance of each
individual senior executive. Based upon consultations with Mr.
Zimmerman and advice and counsel of Christenson Advisors, the Compensation
Committee determined to award Messrs. Knutson and Korth annual incentive
compensation of $575,000 and $307,500, respectively, for 2009. Of
these total incentive amounts, Mr. Knutson received payment of $175,000 in the
form of 23,241 Restricted Shares and Mr. Korth received payment of $37,500 in
the form of 4,981 Restricted Shares."
Mr. Kevin
Woody
November
10, 2010
Page
3
This text
in the 2010 Proxy Statement is communicating that the bonuses paid to Messrs.
Knutson and Korth were based on a subjective assessment and evaluation of MFA's
annual performance and the annual performance of these two
individuals. In future proxy statements, in the event that the bonus
pool is again allocated based on subjective assessments of such individuals, we
would propose to supplement the disclosure to identify any specific aspects of
their individual contributions that were taken into account by the Compensation
Committee. An example of how future disclosure might vary from the
2010 Proxy Statement disclosure is illustrated in the highlighted changes
reflected in the following paragraph:
Annual
incentive compensation for Messrs. Knutson and Korth is determined at the
discretion of the Compensation Committee based upon its subjective assessment
and evaluation of MFA's annual performance and the annual performance of each
individual senior executive. The specific assessments taken into
account by the Compensation Committee with regard to (i) Mr. Knutson included
[__________] and (ii) Mr. Korth included [__________]. Based upon
consultations with Mr. Zimmerman and advice and counsel of Christenson Advisors,
the Compensation Committee determined to award Messrs. Knutson and Korth annual
incentive compensation of $575,000 and $307,500, respectively, for
2009. Of these total incentive amounts, Mr. Knutson received payment
of $175,000 in the form of 23,241 Restricted Shares and Mr. Korth received
payment of $37,500 in the form of 4,981 Restricted Shares."
* * * * *
In
regards to the Form 10-K and the 2010 Proxy Statement, we acknowledge the
following on behalf of the Company as follows:
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the
Company is responsible for the adequacy and accuracy of the disclosure in
the filing;
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Staff
comments or changes to disclosure in response to Staff comments do not
foreclose the Commission from taking any action with respect to the
filing; and
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the
Company may not assert Staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
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Mr. Kevin
Woody
November
10, 2010
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We trust
we have been responsive to the Staff's comments. If you have any
questions, please do not hesitate to contact us.
Very
truly yours,
/s/ William S.
Gorin
William
S. Gorin
President
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cc:
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Timothy
W. Korth, Esq.
Jay
L. Bernstein, Esq.
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