Christopher Smernoff
About Christopher Smernoff
Christopher Smernoff (age 48) is Chief Accounting Officer (since April 2018) at Ellington Financial Inc. (EFC) and Chief Financial Officer of Ellington Credit Company (EARN). He joined Ellington in January 2007 after serving as a manager in PwC’s assurance practice focused on investment management; he holds a B.S. in Accounting and Finance from Boston College and is a member of the AICPA. During his tenure as CAO, Company TSR (value of $100 invested at 12/31/2019) stood at 119.53 in 2024 versus 109.94 in 2023 and 93.05 in 2022, and GAAP net income improved to $148.1 million in 2024 from $87.9 million in 2023 (after a loss in 2022), indicating resumed earnings momentum through 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ellington Financial Inc. | Chief Accounting Officer | Apr 2018–Present | Leads all finance and accounting operations for EFC . |
| Ellington Financial Inc. | Controller | Feb 2010–Apr 2018 | Built and managed financial reporting and internal control processes . |
| Ellington Management Group (EMG) private entities | Assistant Controller | Jan 2007–Feb 2010 | Finance leadership for EMG-managed private entities . |
| PricewaterhouseCoopers LLP | Manager, Assurance (Investment Management) | Pre-2007 | Audit/accounting for investment management clients; foundation in controls and reporting . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Ellington Credit Company (NYSE: EARN) | Chief Financial Officer | Apr 2018–Present | CFO (prior: controller since Apr 2013) . |
| American Institute of Certified Public Accountants | Member | N/A | Professional credential/membership . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary reimbursed by EFC ($) | 204,167 | 226,575 | 215,833 |
| Cash Bonus reimbursed by EFC ($) | 187,571 | 224,019 | 257,168 |
| Total Compensation reported by EFC ($) | 545,034 | 623,872 | 682,960 |
| All Other Comp (dividends on unvested OP LTIP Units) ($) | 25,889 | 26,418 | 24,958 |
- 2024 discretionary cash bonus approved by the Compensation Committee: $280,000 with ~14% ($30,833) deferred until Dec 31, 2025, subject to continued EMG employment (EFC reimburses its allocable portion) .
Performance Compensation
- Program design: No fixed formulas or contractual performance metrics; bonuses are discretionary based on role, contribution, company/EMG performance, market practices, and time allocation to EFC; the Comp Committee determines the reimbursable portion for EFC’s CAO and CFO .
- 2024 equity award: 14,992 OP LTIP Units granted Dec 12, 2024; fair value $185,001 .
| Component | Metric/Terms | 2024 Detail | Vesting |
|---|---|---|---|
| Discretionary Cash Bonus | Performance-based (discretionary) | $280,000 approved; ~14% ($30,833) deferred to 12/31/2025; continued vesting if terminated by EMG without cause | Earns through 12/31/2025; deferred portion forfeitable upon certain events . |
| OP LTIP Units (Equity) | OP LTIP Units under 2017 Plan; dividends at same rate as common ($1.56 per unit in 2024) | 14,992 units granted on 12/12/2024; grant-date FV $185,001 | 10,620 vest 12/12/2025; 4,372 vest 12/12/2026 . |
| Prior OP LTIP Units—2024 vesting | Previously granted OP LTIP Units | 5,623 vested on 12/14/2024 (value $69,444); 4,754 vested on 12/15/2024 (value $58,712) | Vested as of respective dates . |
- 2025 vesting overhang: 10,620 units (Dec 12, 2025) plus 5,622 units from prior grants (Dec 14, 2025), representing upcoming supply from scheduled vesting; remaining 4,372 units vest Dec 12, 2026 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 82,157 OP LTIP Units; less than 1% of shares outstanding (94,513,137 as of 4/10/2025) . |
| Vested vs unvested | 20,614 unvested OP LTIP Units at 12/31/2024 (market value $249,842 at $12.12) . |
| Award mechanics | OP LTIP Units may convert 1:1 into OP Units, redeemable for common shares or cash at company’s election; dividends payable on vested and unvested units . |
| Hedging/pledging | Hedging via short sales or derivatives is prohibited; no explicit pledging disclosure found in proxy . |
| Ownership guidelines | Not disclosed in proxy. |
Employment Terms
| Category | Terms (as applicable to CAO) |
|---|---|
| Employer | Employee of EMG; EFC reimburses portion of salary/bonus for CAO/CFO; EFC may grant equity/bonuses at its discretion . |
| Severance (cash) | For 2024 deferred bonus, continued vesting if terminated by EMG other than for “cause” (or if voluntarily resigns, deferred bonus does not continue) . |
| Equity on termination/CIC | If terminated by EMG other than for cause or on change in control, outstanding unvested OP LTIP Units remain outstanding and continue to vest per schedule (no acceleration) . |
| Definitions | “Cause” and “Change in Control” defined in award agreements/employment contracts; CIC includes >50% acquisition, certain reorganizations, or sale of substantially all assets, with customary exceptions . |
| Clawback | Company-wide clawback policy effective Nov 2, 2023 for restatements; recoups incentive-based comp received after Oct 2, 2023 in excess of restated amounts . |
| Non-compete/Non-solicit | Not disclosed in proxy. |
Company Performance Context (for alignment)
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| TSR: Value of $100 Investment (EFC) | 90.17 | 113.92 | 93.05 | 109.94 | 119.53 |
| TSR: Peer Group (FTSE NAREIT Mortgage REIT Index) | 81.38 | 94.05 | 69.27 | 79.79 | 79.96 |
| Net Income (Loss) ($000s) | 28,377 | 140,556 | (70,869) | 87,898 | 148,104 |
- Say-on-Pay support: ~86% of votes cast approved executive compensation at the 2024 annual meeting; the Board continues annual say-on-pay .
Compensation Structure Analysis
- Mix and trend: For the CAO, EFC-reimbursed cash (salary+bonus) rose from $391.7k (2022) to $481.2k (2023) to $473.0k (2024), while equity grant fair value increased to $185.0k in 2024; total reported comp rose to $683.0k in 2024 from $623.9k in 2023 and $545.0k in 2022 .
- Metric rigor: The Company and EMG do not employ fixed performance formulas for CAO/CFO compensation; awards are discretionary—raising some pay-for-performance subjectivity; however, the Comp Committee controls the reimbursable share and equity grants .
- Vesting treatment: Unvested OP LTIP Units continue to vest on EMG no‑cause termination or upon change in control (no acceleration), emphasizing retention continuity through corporate transitions .
- Clawback and hedging controls: A formal clawback policy (effective Nov 2023) and prohibition on hedging with derivatives/short sales mitigate governance risk; no pledging disclosure noted .
Investment Implications
- Alignment: Smernoff’s meaningful unvested equity (20,614 units) and ongoing OP LTIP grants tie him to multi‑year outcomes; dividends on unvested units align cash flow to common shareholder payouts, though lack of explicit performance thresholds tempers pay-for-performance purity .
- Supply/overhang: Scheduled 2025 vestings (10,620 units on 12/12/2025 and 5,622 units on 12/14/2025) and 2026 vesting (4,372 units) could contribute incremental sellable supply post-vesting; actual selling pressure is uncertain given beneficial ownership is <1% overall .
- Retention: Continued vesting of equity and deferred bonus on EMG no‑cause termination, plus absence of acceleration on CIC, support retention and reduce forced selling incentives around corporate events .
- Governance: External management structure (fees to EMG) creates inherent related‑party considerations, but the Board maintains a clawback policy, hedging prohibitions, and a Compensation Committee oversight framework; say‑on‑pay results (86% approval) suggest shareholder acceptance of the model in the latest cycle .