Mark Tecotzky
About Mark Tecotzky
Mark Tecotzky is Executive Vice President of Ellington Credit Company (EARN), age 63, and previously served as Co‑Chief Investment Officer from October 2012 through April 2025; he is also Vice Chairman—Co‑Head of Credit Strategies at Ellington Management Group (EMG), head portfolio manager for all MBS/ABS credit, and Co‑Chief Investment Officer of Ellington Financial Inc. (EFC) since March 2008 . He holds a B.S. from Yale University and received a National Science Foundation fellowship to study at MIT . He sits on EMG’s Investment and Risk Management Committee alongside trustees Michael Vranos and Laurence Penn, supporting portfolio and risk oversight for the Fund . EARN does not disclose individual executive TSR or revenue/EBITDA growth metrics tied to Tecotzky; his economic incentives at EARN are through EMG’s share of management/performance fees under EARN’s advisory structure rather than Fund‑paid salary/bonus .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ellington Credit Company (EARN) | Executive Vice President | Apr 2025–present | Executive leadership through conversion to 1940 Act fund; supports CLO-focused strategy |
| Ellington Credit Company (EARN) | Co‑Chief Investment Officer | Oct 2012–Apr 2025 | Led investment activities; pivot from Agency MBS toward CLOs; maintained 1940 Act exemption pre-conversion |
| Ellington Management Group (EMG) | Vice Chairman—Co‑Head of Credit Strategies; Head PM for MBS/ABS credit | Jul 2006–present | Built and managed structured credit platform; leads MBS/ABS strategies |
| Credit Suisse | Senior trader, Mortgage Dept. | Prior to Jul 2006 (dates not disclosed) | Developed/ran hybrid ARM securitizations; conduit pricing; hedging residual portfolio |
| Kidder Peabody | Managing Director, pass-throughs/CMOs trader | Prior to Credit Suisse (dates not disclosed) | Traded Agency/non‑Agency pass-throughs and structured CMOs |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ellington Financial Inc. (EFC) | Co‑Chief Investment Officer | Mar 2008–present | Oversees EFC credit investments; cross-platform experience informs EARN strategy |
| Ellington Management Group (EMG) | Vice Chairman—Co‑Head of Credit Strategies | Jul 2006–present | Leads firm-wide credit strategy; supports advisory services to EARN |
Fixed Compensation
| Component | 2024/2025 Details | Notes |
|---|---|---|
| Base salary ($) | Not paid by EARN | Executives are EMG employees; no Fund-paid cash comp; not required to devote a specific % of time to EARN |
| Target bonus (%) | Not disclosed at Fund level | Compensation/benefits paid by EMG/Adviser; EARN does not reimburse NEO cash comp (other than allocable admin personnel post-Conversion) |
| Actual bonus paid ($) | Not paid by EARN | — |
| Trustee/Director equity | Officers do not receive trustee grants; officer awards restricted by 1940 Act post‑Conversion | 2023/2024 equity plans terminated; post‑Conversion EARN will not grant restricted shares to trustees/officers |
Performance Compensation
| Performance Element | Metric | Target/Hurdle | Payout Formula | Clawback/Accumulation | Vesting/Payment Timing |
|---|---|---|---|---|---|
| Adviser Performance Fee (flows to EMG owners including Tecotzky via EMG profits) | Pre‑Performance Fee Net Investment Income (PPFNII) | 2.00% per quarter Hurdle Rate on NAV of Common Equity; “Hurdle Amount” adjusted for share changes | 100% catch‑up on PPFNII above hurdle until 121.21% of hurdle; thereafter 17.5% of PPFNII each quarter | No accumulation of hurdle; no clawback of fees; quarter-by-quarter isolation | Calculated and payable quarterly in arrears |
| Adviser Base Mgmt Fee | Net Asset Value | 1.50% per annum on quarter-end NAV | Linear | Not applicable | Quarterly in arrears |
Key structural considerations: PPFNII excludes realized/unrealized gains/losses; Manager could earn performance fees during GAAP net losses; fee structure may incentivize higher-risk/income assets or leverage; PPFNII-based hurdle decreases if NAV of Common Equity declines .
Equity Ownership & Alignment
| As of | Shares Beneficially Owned | % of Shares Outstanding | Dollar Range of Equity Securities |
|---|---|---|---|
| Apr 10, 2025 | 8,282 | <1% (star notation) | $50,001–$100,000 |
- Pledging and hedging policies: Insiders are prohibited from hedging/monetization transactions, short sales, pledging company securities as collateral, purchasing on margin; 10b5‑1 plans permitted with pre‑clearance .
- Stock ownership guidelines: Not disclosed in proxy/10‑K materials; EARN cites Insider Trading Policy and corporate governance materials available on website .
Employment Terms
| Item | Disclosure |
|---|---|
| Employment start dates | EMG: Jul 2006; EFC Co‑CIO since Mar 2008; EARN Co‑CIO Oct 2012–Apr 2025; EARN EVP Apr 2025–present |
| Employer/affiliations | EMG/Adviser/Administrator officer; serves EARN via Investment Advisory and Administration Agreements |
| Contract term length/expiration | Individual employment contracts not disclosed; executives are EMG employees available via Services Agreement |
| Auto‑renewal | Not disclosed for individual; Adviser agreement renewals per 1940 Act after initial 2‑year term |
| Severance/change‑of‑control economics | Individual severance not disclosed; Adviser Investment Advisory Agreement has no termination fee; prior Management Agreement had termination fee (5% NAV) but Manager agreed to waive upon Conversion completion |
| Non‑compete/non‑solicit/garden leave | Not disclosed |
| Post‑termination consulting | Not disclosed |
Performance & Track Record
- Strategic pivot: Board credited Manager (EMG) with guiding EARN’s transformation from Agency MBS REIT to CLO-focused registered closed-end fund, achieving positive economic results on new CLO investments while maintaining 1940 Act exemption pre‑conversion and utilizing NOLs during C‑Corp period .
- Risk oversight: EMG’s Investment and Risk Management Committee includes Tecotzky; Audit Committee receives regular briefings on portfolio risk and cybersecurity posture .
Compensation Structure Analysis
- Shift in pay mechanics: For key principals (including Tecotzky), compensation is via EMG’s share of advisory/performance fees rather than Fund‑paid salary/bonus, increasing reliance on PPFNII outcomes versus GAAP profitability .
- Risk incentives: Quarterly catch‑up and lack of clawback/accumulation can allow fees despite subsequent weak performance; PPFNII excludes realized/unrealized losses, potentially misaligning with common shareholders during drawdowns .
- Governance improvement: Investment Advisory Agreement removes termination fee versus prior Management Agreement, improving shareholder economics under adviser termination scenarios .
Related Party and Interlocks
- Affiliates: Tecotzky is an officer of the Adviser and Administrator; EMG provides personnel/services to Adviser/Administrator under Services Agreement; payments accrue to EMG Holdings/VC Investments .
- Restrictions: Post‑Conversion, Fund subject to 1940 Act prohibitions on certain affiliated transactions (principal/joint) absent exemptive relief .
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑pay voting is not applicable; trustees (independent) receive cash retainers and restricted shares pre‑Conversion; post‑Conversion trustee/officer equity grants are restricted by 1940 Act .
Expertise & Qualifications
- Education: B.S. Yale; NSF fellowship at MIT .
- Technical expertise: Structured credit, MBS/ABS trading/securitization; senior trading roles at Credit Suisse and Kidder Peabody .
- Board qualifications: Member of EMG’s Investment and Risk Management Committee advising on investment/risk management to Fund .
Work History & Career Trajectory
| Organization | Role | Tenure | Notable Contributions |
|---|---|---|---|
| EMG | Vice Chairman—Co‑Head Credit Strategies | Jul 2006–present | Leads MBS/ABS credit; firm-wide structured credit expertise |
| EFC | Co‑CIO | Mar 2008–present | Oversees EFC investments, cross‑platform leverage |
| EARN | Co‑CIO → EVP | Oct 2012–Apr 2025; Apr 2025–present | Led pivot to CLOs; executive leadership during Conversion |
| Credit Suisse | Senior Trader (Mortgage) | Pre‑2006 | Built hybrid ARM/second lien securitizations; ran hybrid ARM business |
Compensation Committee Analysis
- Post‑Conversion structure: Fund now operates under 1940 Act governance; standing Audit and Nominating & Corporate Governance Committees comprised solely of Independent Trustees; Compensation Committee dissolved pre‑Conversion .
- Independent oversight: Board majority independent; executive sessions; committee charters posted publicly .
Equity Ownership & Alignment Details
- Beneficial ownership: Tecotzky holds 8,282 common shares; all executives/trustees as a group hold 510,442 shares (1.4%) as of Apr 10, 2025; Tecotzky’s ownership <1% .
- Shares outstanding: 37,559,195 common shares as of Mar 31, 2025 record date .
- Policy constraints: No pledging, hedging, short sales, margin purchases; permitted Rule 10b5‑1 plans with compliance authorization .
Investment Implications
- Alignment: Low direct common share ownership (<1%) combined with EMG profit participation suggests Tecotzky’s incentives are primarily tied to advisory/performance fee generation (PPFNII) rather than GAAP earnings or NAV growth; fee design may reward income even amid realized/unrealized losses .
- Selling pressure risk: Insider policies prohibit pledging/hedging/short sales, reducing forced‑selling/hedging‑related misalignment; 10b5‑1 plans require pre‑clearance, tempering opportunistic trading risk .
- Retention: Long EMG/EFC tenure and cross‑platform leadership indicate strong institutional anchoring; however, executives are not required to devote a specific percentage of time to the Fund, creating potential execution bandwidth risk during market stress .
- Governance: Removal of adviser termination fee under new Advisory Agreement improves shareholder leverage in adverse performance scenarios; quarterly performance fee catch‑up and no clawback remain structural red flags for pay‑for‑performance alignment .