Wellington Denahan to Step Down As Annaly Capital CEO

By Liam Pleven 

One of the highest-paid female executives in the U.S. is taking a pay cut.

Annaly Capital Management Inc., the nation's largest real-estate investment trust focused on residential mortgages, on Monday said Wellington Denahan will step down as chief executive in September.

Ms. Denahan, who co-founded Annaly, will remain the firm's chairman and assume the new title of executive chairman.

Kevin Keyes, Annaly's current president, will also take on the role of chief executive on Sept. 30, the New York company announced.

Ms. Denahan, 51 years old, has garnered attention as one of the highest paid female executives in the U.S. She made $35 million in 2011, when she was the company's chief investment officer and chief operating officer, according to a securities filing.

In recent years, Annaly has switched to an arrangement in which company managers are employed by an outside firm and run the company under a contract with Annaly. Under this arrangement, the compensation Ms. Denahan and others receive isn't disclosed.

Ms. Denahan said her compensation as executive chairman "will not be comparable" to her current pay. Mr. Keyes, 47, said he hadn't discussed his compensation as CEO with the board of directors.

Ms. Denahan said in an interview the change will allow her to focus on "the aspects of the business that are the most important in the long term." She said that Mr. Keyes "has more energy than I do at this point for the day-to-day."

Mr. Keyes said he and Ms. Denahan have worked together closely for years. "It's not like it's a dramatic change," he said.

Annaly invests mainly in residential mortgages backed by mortgage giants Fannie Mae and Freddie Mac, which sets it apart from other real-estate investment trusts, or REITs, that focus on shopping malls, office buildings and the like.

Dan Altscher, a senior research analyst at FBR Capital Markets, said the change could be seen as a sign that challenges lie ahead for the firm if the Federal Reserve moves ahead with its plans to raise interest rates.

At the same time, he said some investors might want the company to buy back shares, which he said it hasn't done in recent years, and they might hope a change at the top will prompt that move.

Mr. Keyes said "We're always considering all our options."

Write to Liam Pleven at [e-mail]

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