Brandon Hetzel

About Brandon Hetzel

Brandon Hetzel (age 38) is Chief Financial Officer and Treasurer of Advanced Flower Capital Inc. (AFCG). He became CFO in March 2023 after serving as EVP, Controller (Dec 2022–Mar 2023) and Controller (Sep 2020–Dec 2022). He previously was VP of Finance at El‑Ad National Properties and spent seven years at PwC in the REIT audit practice. He holds an MBA, BSBA in Accounting, and BSBA in Finance from the University of Central Florida and is a licensed CPA. He also serves as CFO & Treasurer of Sunrise Realty Trust (SUNS) since Feb 2024 and CFO of Southern Realty Trust (SRT) since Sep 2023 . Company-level TSR or growth metrics tied to his tenure are not disclosed in the proxies reviewed.

Past Roles

External Roles

Fixed Compensation

Note: AFCG is externally managed; executives are employed by the Manager, and AFCG reimburses its allocable share of compensation. Equity can be granted under AFCG’s 2020 Stock Incentive Plan .

Compensation structure observations:

• 2024 cash mix shifted toward bonus (salary down, bonus up) while equity grants increased (see below), indicating higher at-risk pay year-over-year .

Performance Compensation

Stock and Option Awards (grants/values and outstanding awards)

Additional structural change (material for supply/demand in AFCG shares):

• In connection with the planned conversion from REIT to externally managed BDC, AFCG intends to terminate its stock incentive plan, accelerate vesting of all outstanding restricted stock, and repurchase outstanding stock options at fair market value. Estimated 450,162 shares (≈1.99% of shares outstanding) would accelerate, creating potential near-term selling pressure as awards become freely tradable .

Performance metrics tied to pay:

• The proxy does not disclose specific performance metrics for Mr. Hetzel’s bonus or equity vesting (awards are time-based). As an externally managed company, performance fees accrue to the Manager (not the individual), though the Manager’s fee structure is relevant to incentives (see alignment below) .

Equity Ownership & Alignment

Ownership policies and potential conflicts/alignment:

• Hedging and pledging of AFCG stock are prohibited for insiders, which reduces misalignment risk .
• Company has a Dodd‑Frank/Nasdaq-compliant clawback policy for erroneously awarded incentive compensation to covered officers following an accounting restatement .
• Manager ownership: Mr. Hetzel beneficially owns ~1.5% of the Parent Manager that wholly owns AFCG’s external manager. Manager economics include a base management fee (1.50% of average gross assets, dropping to 1.00% above 1.0x D/E) and a 17.5% incentive fee on income and realized capital gains under the Proposed Investment Advisory Agreement tied to the BDC conversion. This creates indirect exposure for Mr. Hetzel to fee-driven outcomes (asset growth/leverage, sustained net investment income above a 6% hurdle on net assets) .

Employment Terms

Performance & Track Record

• Corporate actions during tenure: AFCG completed the spin-off of Sunrise Realty Trust (SUNS) in July 2024; Mr. Hetzel has served as SUNS CFO & Treasurer since Feb 2024, indicating leadership continuity across entities .
• Company-level performance metrics (TSR, revenue, EBITDA growth) specific to Mr. Hetzel’s tenure are not disclosed in the proxies reviewed.

Compensation Structure Analysis

• Year-over-year mix shift: 2024 saw higher equity grant value ($174,985 vs. $99,991) and a higher cash bonus ($138,891 vs. $79,975), with lower base salary ($130,689 vs. $196,737), increasing at-risk compensation and equity linkage vs. 2023 .
• Incentive design: Equity awards are time-based; no disclosed performance metrics for bonus or vesting. As an external manager stakeholder (1.5% of Parent Manager), Mr. Hetzel’s indirect incentives may also be influenced by management/incentive fees driven by asset growth, leverage, and net investment income above a 6% quarterly hurdle (annualized) once the BDC advisory agreement is effective .

Vesting Schedules and Insider Selling Pressure

• Time-based RS schedule across 2022–2024 grants results in regular annual vesting; unvested RS totaled 29,022 as of Mar 28, 2025 .
• If/when the BDC conversion finalizes, all outstanding restricted stock will accelerate and options will be repurchased at fair market value, with an estimated 450,162 shares (≈1.99% of shares outstanding) accelerating across insiders—potentially increasing near-term sellable float and creating technical selling pressure .

Related Party and Alignment Considerations

• External management: Compensation to Manager in 2024 included ~$3.6M base fee (net of rebate) and ~$6.8M incentive compensation; ~$2.9M of Manager expenses reimbursed—these amounts contextualize the fee pool in which Manager owners (including Mr. Hetzel at 1.5%) participate .
• Proposed BDC advisory terms: Base fee on gross assets (tiered with leverage breakpoint), incentive fee of 17.5% on NII (with 6% hurdle on net assets using a trailing four-quarter period and 100% catch-up to 1.8182% quarterly) and 17.5% on realized capital gains net of losses/unrealized depreciation. The fee design may encourage asset growth and leverage within risk oversight; the base fee rate steps down above 1.0x D/E to partially mitigate leverage incentives .

Investment Implications

• Alignment: Direct AFCG share ownership is small (<1%), but unvested RS provides ongoing equity exposure; hedging/pledging prohibitions and a clawback policy support alignment and governance standards .
• Fee-linked incentives: A 1.5% ownership in the Parent Manager ties Mr. Hetzel to fee economics that benefit from asset growth and sustained NII above the 6% hurdle under the proposed BDC advisory agreement; investors should monitor leverage, portfolio risk, and NII durability relative to the hurdle .
• Technicals/supply: Planned acceleration of restricted stock and repurchase of options ahead of conversion could increase near-term float and selling pressure across insiders, a potential headwind around implementation timing .
• Retention risk: A 12-month base salary severance offers moderate retention protection; absence of disclosed change-of-control terms at the individual level leaves CoC economics unclear .
• Execution focus: With dual CFO roles at SUNS and SRT, bandwidth and prioritization are relevant; however, continuity across affiliated platforms may also enhance execution and information flow .