TWO HARBORS INVESTMENT CORP.

Pay Versus Performance Table

As required by Item 402(v) of Regulation S-K, we are providing the information below concerning the relationship between “Compensation Actually Paid” to our named executive officers for the years ending December 31, 2024, 2023, 2022, 2021 and 2020, and certain measurements of the company’s performance for those periods, to illustrate “pay versus performance.” The Pay Versus Performance Table should be read in conjunction with the footnotes below as well as the information provided in the section titled “Pay Versus Performance Supplemental Information” that follows.

(1)As described in the “Summary Compensation Table” on page 40 and elsewhere in this Proxy Statement, prior to August 15, 2020, we were an externally managed company and did not pay any cash compensation to our named executive officers. Accordingly, cash compensation amounts for fiscal year 2020 reflect amounts paid to our NEOs beginning August 15, 2020.

(2)Mr. Greenberg was appointed as Chief Executive Officer in June 2020. We did not pay cash compensation to our former CEO, Thomas Siering, in 2020 and, accordingly, compensation information for Mr. Siering is limited to “Other Compensation” and equity awards.

(3)As required by Item 402(v) of Regulation S-K, reconciliation tables illustrating the calculation of Compensation Actually Paid are presented under “Pay Versus Performance Supplemental Information — Reconciliation of Summary Compensation to Compensation Actually Paid” below on page 51.

(4)Individuals comprising the non-principal executive officers (non-PEOs) in columns (d) and (e) are: for 2024, Mr. Dellal, Mr. Letica, Ms. Sandberg, Mr. Rush and, until her departure in August 2024, Ms. Riskey; for 2023 and 2022, Ms. Riskey, Mr. Letica, Ms. Sandberg, and Mr. Rush; and for 2021, Ms. Riskey, Ms. Sandberg and Mr. Rush and, until his departure in June 2021, Matthew Koeppen; and for 2020, Ms. Riskey, Mr. Koeppen and Ms. Sandberg. As noted in the Summary Compensation Table, Mr. Letica was appointed as Chief Investment Officer in 2022, and Mr. Rush was not a named executive officer in 2020.

(5)Total Stockholder Return and Peer Group Total Stockholder Return assume $100 invested at December 31, 2020.

(6)As permitted by SEC rules, the Peer Group referenced for the purpose of the Peer Group Total Stockholder Return is the FTSE Nareit Mortgage REITs Index.

(7)Represents GAAP Net Income as reported in our Annual Report on Form 10-K for the year ended December 31 for each of the years shown. See also “Pay Versus Performance Supplemental Information — Relationship of Net Income to Compensation Actually Paid” on page 54 below for further information.

(8)We have designated relative total economic return (rTER) as our company selected measure for this table. We believe this additional financial measure represents the most important financial performance measure used by the company in its annual incentive compensation plan to link Compensation Actually Paid to our named executive officers for the 2024 performance year. As used in our annual incentive compensation plan, rTER compares our total economic return for the 12-month performance period ended September 30 to the total economic return of our performance group peers, however, in accordance with Regulation S-K, we have computed rTER for purposes of this table based on the year ended December 31 for each year reported. For further information on our annual cash incentive plan and how we use rTER as a performance metric in our compensation program, please refer to the section titled “Annual Incentive Compensation” above on page 29. The companies included in our performance peer group for 2024 are included in the section titled “Peer and Competitive Market Positioning" above on page 36. AAIC was not included in our peer group for 2024 because AAIC was acquired by EFC in December 2023 and was delisted in connection with such acquisition. For 2023, the performance peer group companies were NLY, AGNC, IVR, PMT, DX, RITM, ARR, ORC, CHMI, AAIC and EARN. For 2022, the performance peer companies were NLY, AGNC, IVR, PMT, DX, RITM, CIM, MITT, ARR, ORC, CHMI, AAIC, EFC, NYMT, RWT, MFA and WMC. For 2021 and 2020, the performance peer companies were NLY, AGNC, IVR, PMT, DX, EARN, RITM, CIM, MITT, ARR, ORC, CHMI, AAIC, EFC, NYMT, RWT, MFA and WMC.

Pay Versus Performance Supplemental Information

While the Compensation Committee uses several performance measures to align executive compensation with company performance, including TER and 3-year TSR on absolute and relative bases, not all of those performance measures are presented in the Pay Versus Performance table and, therefore, the company’s performance measures may not align with Compensation Actually Paid. As required by Item 402(v) of Regulation S-K, we are providing the following supplemental information to assist with understanding certain information in the Pay Versus Performance table as it relates to Compensation Actually Paid and our executive compensation program.

Reconciliation of Summary Compensation to Compensation Actually Paid

The following reconciliation tables are included in order to illustrate the calculation of Compensation Actually Paid in the Pay Versus Performance table above on page 50. Specifically, the following reconciliations show the amounts that were deducted from and added to the Summary Compensation Table total compensation shown on page 40 for the current CEO, the prior CEO, and the average of the other non-CEO named executive officers for each of the years reported.

Relationship of Total Stockholder Return to Compensation Actually Paid

The following graph illustrates the relationship between our total stockholder return (TSR) and the Compensation Actually Paid to our current CEO, our prior CEO and the average of other non-CEO named executive officers. As shown, Compensation Actually Paid generally aligns with TSR, primarily due to the company’s use of equity awards, which are tied directly to our stock price. For further information about our use of equity awards as a component of compensation is, please refer to “Long-Term Incentive Compensation” on page 32.

The following graph compares our total stockholder return as compared to the FTSE Nareit Mortgage REITs Index for the years reported.

Relationship of Net Income to Compensation Actually Paid

The following graph illustrates the relationship between GAAP net income and the compensation actually paid to our current CEO, prior CEO and the average of other non-CEO named executive officers. The majority of our assets are carried at fair value, however, the unrealized gains and losses are included in either net income or accumulated other comprehensive income depending on the asset type. For this reason, net income is an incomplete measure and does not reflect the company’s total return. The Compensation Committee does not use net income as a performance measure in our executive compensation program.

Relationship of Relative Total Economic Return to Compensation Actually Paid

The following graph illustrates the relationship between relative total economic return (rTER) and the Compensation Actually Paid to our current CEO, prior CEO and the average of other non-CEO named executive officers. We have designated rTER as our company selected measure in the Pay Versus Performance table. We believe this financial measure represents the most important financial performance measure we used in our annual incentive compensation plan to link Compensation Actually Paid to our named executive officers for the 2024 performance year. For information regarding our use of rTER in our annual incentive compensation program, please refer to “Annual Incentive Compensation” on page 29.

Most Important Measures to Determine Compensation Actually Paid for Fiscal Year 2024

As described in our CD&A, our compensation program for our named executive officers includes annual cash incentive compensation and long-term equity incentive compensation, which are variable performance-based, or at-risk, compensation designed to directly link pay to performance.

In 2024, performance-based annual incentive and long-term incentive compensation served as a material component of the compensation package for each of our named executive officers. The five items listed below represent the metrics used in our annual incentive and long-term incentive compensation and, therefore, we believe are the most important metrics we used to determine Compensation Actually Paid for the performance year ending December 31, 2024. These metrics are further described in our CD&A in the section titled “Annual Incentive Compensation” beginning on page 29 and “Long-Term Incentive Compensation” beginning on page 32.

Most Important Performance Measures for 2024

Relative Total Economic Return

Absolute Total Economic Return

Relative 3-Year Total Stockholder Return

Absolute 3-Year Total Stockholder Return

Strategic and Operational Performance Goals and Objectives