Daniel Margolis
About Daniel Margolis
Daniel Margolis is General Counsel of Ellington Financial Inc. (EFC) and General Counsel of Ellington Management Group (EMG), serving as EFC’s General Counsel since August 2013 and previously as Secretary from July 2010 to August 2013; he is also General Counsel of Ellington Residential Mortgage REIT (EARN) since April 2013 . He holds a J.D. from NYU School of Law (cum laude) and a B.A. from Binghamton University (magna cum laude, Phi Beta Kappa), and was an Assistant U.S. Attorney (SDNY) receiving the DOJ’s John Marshall Award in 2004 . As an officer of an externally managed REIT, his compensation is paid by EMG (not directly by EFC), with EFC reimbursing only CFO/CAO compensation and making occasional awards to those roles; no Daniel-specific pay metrics are disclosed . Company performance during his tenure includes cumulative total shareholder return (TSR) recovery from the pandemic era and variable net income; see performance table below .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ellington Financial Inc. | General Counsel | Aug 2013–present | Leads legal, regulatory, compliance, documentation, and litigation for EFC; supports governance and transactions . |
| Ellington Financial Inc. | Secretary | Jul 2010–Aug 2013 | Corporate secretary responsibilities during early EFC growth phase . |
| Ellington Residential Mortgage REIT (EARN) | General Counsel | Apr 2013–present | Oversees legal for EARN, aligning REIT governance and disclosure . |
| Ellington Management Group (EMG) | General Counsel | Jul 2010–present | Advises EMG on legal, regulatory, and compliance across investment platforms . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| U.S. Attorney’s Office (SDNY) | Assistant U.S. Attorney | 2000–2004 | Prosecuted complex white-collar crimes (securities, investment, tax fraud, money laundering); DOJ John Marshall Award (2004) . |
| Wilmer, Cutler, Pickering, Hale and Dorr LLP | Junior Partner | 2004–2007 | Represented corporations/financial institutions in regulatory investigations and complex civil litigation . |
| Pillsbury Winthrop Shaw Pittman LLP | Partner | 2007–2010 | Led client matters in corporate/regulatory investigations and litigation . |
Fixed Compensation
- EFC is externally managed; executive officers (including General Counsel) are EMG employees. EFC does not pay cash compensation to executive officers and does not reimburse compensation for non-CFO/CAO officers; therefore, no Daniel-specific base salary or bonus is disclosed .
- EFC reimburses EMG only for CFO and CAO wages/bonuses; no reimbursement applies to General Counsel .
Performance Compensation
- No fixed, contractual performance metrics are used by EMG/EFC for discretionary compensation; pay decisions consider role, contributions, company/EMG performance, and market practices. No Daniel-specific incentive structure or award detail (RSUs/PSUs/options) is disclosed .
- Clawback policy: In the event of a financial restatement, EFC will recoup incentive-based compensation received after Oct 2, 2023 by executive officers to the extent compensation exceeds amounts under restated measures .
Equity Ownership & Alignment
- Individual beneficial ownership for Daniel Margolis is not enumerated; the share-ownership table lists only directors and NEOs. As of April 10, 2025, executives/directors as a group held 3,916,538 shares (4.1% of outstanding), with detailed individual holdings disclosed for directors/NEOs; Daniel is included in the ten-person group but not itemized .
- Alignment policies: Officers/directors are prohibited from short sales or derivative hedging transactions in EFC securities .
- Insider trading filings: Public trackers indicate no recent Form 4 trades by Daniel Margolis in EFC over the past 18 months; he frequently serves as attorney-in-fact on others’ Form 4 filings, reinforcing a compliance facilitation role .
- Pledging: No pledging disclosure for Daniel; not addressed in the proxy. Hedging prohibitions are explicit .
Employment Terms
- Management agreement: Daniel is an officer of EFC’s external Manager and of EMG; the Manager earns a base fee of 1.50% of OP equity and potential incentive fees subject to hurdle-rate and loss-carryforward mechanics; fees are paid by EFC and inform EMG compensation pools rather than EFC-specific executive contracts .
- Indemnification: EFC provides maximum indemnification agreements for directors and executive officers, including advance of expenses .
- Termination/change-in-control: EFC outlines severance/vesting continuation specifically for CFO/CAO awards under certain conditions; no Daniel-specific severance or accelerated vesting terms are disclosed .
Performance & Track Record
Company-level metrics relevant to Daniel’s tenure and governance oversight:
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 | |---|---|---:|---:|---:|---:|---:| | Cumulative TSR – $100 initial investment | $90.17 | $113.92 | $93.05 | $109.94 | $119.53 | | Peer Group TSR (FTSE Nareit Mortgage REIT Index) – $100 initial investment | $81.38 | $94.05 | $69.27 | $79.79 | $79.96 | | Net Income (GAAP, $ thousands) | $28,377 | $140,556 | $(70,869) | $87,898 | $148,104 |
Contextual milestones impacting legal workload:
- EFC completed the merger with Arlington Asset Investment Corp. (2023) and terminated a proposed merger with Great Ajax Corp. (2023), noted in audit-related fees disclosures .
Say-on-Pay & Shareholder Feedback
| Year | Say-on-Pay Approval (%) | Notes |
|---|---|---|
| 2023 | 87% | Annual advisory vote frequency retained; Compensation Committee viewed support as validation of approach . |
| 2024 | 86% | Continued annual advisory votes; framework unchanged for reimbursed roles . |
Compensation Structure Analysis
- Increased reliance on EMG-managed discretionary compensation rather than EFC-specific contracts for most officers (including General Counsel) implies limited direct pay-for-performance linkage at the EFC entity level .
- CFO/CAO awards show use of OP LTIP Units with multi-year vesting; no analogous disclosure for General Counsel .
Risk Indicators & Red Flags
- Hedging prohibited; no explicit pledging policy cited, and no Daniel-specific pledging disclosure .
- Section 16(a) compliance was timely in 2023 except for two late Form 4s by directors; no issues cited for Daniel .
- No EFC incentive fee payments in 2023–2024, helping mitigate fee-driven conflicts in those years .
Investment Implications
- Alignment: As EMG’s General Counsel and EFC officer, Daniel’s compensation is EMG-driven and not disclosed at the EFC level, limiting direct visibility into pay-for-performance alignment specific to EFC. However, overall officer/director/EMG affiliate ownership of ~4% at YE 2024 and hedging prohibitions provide some alignment safeguards .
- Retention risk: Long tenure across EMG/EFC/EARN and frequent attorney-in-fact roles on insider filings suggest institutional embeddedness and low near-term turnover risk; absence of EFC-specific equity grants for General Counsel reduces entity-level lock-in compared to CFO/CAO .
- Trading signals: No recent Form 4 activity by Daniel and no pledging disclosures imply low insider selling pressure from the General Counsel channel; broader insider activity was limited with no incentive fees incurred in 2023–2024, reducing optics of performance-fee extraction .
- Governance: Robust indemnification and clawback policies, plus external management fee transparency (base 1.50%, incentive linked to Adjusted Net Income over hurdle), place emphasis on Board oversight of Manager rather than individual exec pay contracts—investors should monitor management agreement economics, say-on-pay trends, and equity plan usage as the primary levers .