JR Herlihy
About JR Herlihy
JR Herlihy (age 43) is Ellington Financial Inc.’s Chief Financial Officer (since April 2018) and Treasurer (since May 2017); he joined Ellington Management Group (EMG) in April 2011 and also serves as a Managing Director at EMG, with prior roles spanning real estate investing and operations; he holds a B.A. in Economics and History from Dartmouth College (summa cum laude, Phi Beta Kappa) . EFC’s recent performance context during his tenure includes 2024 GAAP net income of $148.1 million versus $87.9 million in 2023, while five‑year cumulative TSR (value of a $100 investment from 12/31/2019) stood at 119.53 vs 79.96 for the FTSE NAREIT Mortgage REIT Index peer group in 2024 . The company is externally managed, and EFC’s proxy emphasizes that NEO compensation (including the CFO) is largely discretionary rather than tied to fixed formulas or specific financial performance metrics .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ellington Financial Inc. (EFC) | Chief Financial Officer | Apr 2018–Present | Leads finance, capital markets disclosure, and public company reporting for an externally managed mortgage/credit REIT . |
| Ellington Financial Inc. (EFC) | Treasurer | May 2017–Present | Oversees treasury and liquidity functions for EFC . |
| Ellington Residential Mortgage REIT (EARN) | Chief Operating Officer | Apr 2018–Present | Operational leadership at affiliated externally managed REIT . |
| Ellington Residential Mortgage REIT (EARN) | Treasurer | May 2017–Present | Treasury oversight at EARN . |
| Ellington Housing Inc. (EHR) | Co‑Chief Investment Officer | Sep 2012–Dec 2016 | Co-led investment strategy for single‑ and multi‑family residential assets . |
| Ellington Housing Inc. (EHR) | Interim Chief Financial Officer | Mar 2015–Jan 2016 | Interim finance leadership for REIT vehicle . |
| Ellington Management Group (EMG) | Managing Director | Apr 2011–Present | Senior leadership roles across Ellington’s platforms . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Ellington Management Group (EMG) | Managing Director | Apr 2011–Present | Employer under external management structure . |
| Ellington Residential Mortgage REIT (EARN) | COO; Treasurer | COO: Apr 2018–Present; Treasurer: May 2017–Present | Affiliates’ executive roles (compensated by EMG/EARN) . |
| Ellington Housing Inc. (EHR) | Co‑CIO; Interim CFO | Co‑CIO: Sep 2012–Dec 2016; Interim CFO: Mar 2015–Jan 2016 | Investment/finance leadership at prior Ellington vehicle . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| EMG Base Salary for Herlihy ($) | 225,729 | 249,000 | 310,000 |
| Salary Reimbursed by EFC ($) | 225,729 | 249,000 | 206,150 |
Notes:
- EFC reimburses EMG only for CFO/CAO compensation based on estimated time allocation; other NEO compensation is borne by EMG from management fees .
- EMG sets base, with EFC Compensation Committee approving reimbursed amounts; no fixed compensation agreements between EFC and the CFO exist .
Performance Compensation
Discretionary Cash Bonus and Equity Awards
- Compensation philosophy: No fixed formulas; bonuses are discretionary, considering company/individual performance, market practices, responsibilities, and time allocation; EFC approves reimbursed amounts for CFO .
- 2024 cash bonus: $590,000 (paid by EMG), with ~27% deferred until 12/31/2025; EFC’s committee determined its reimbursable portion as $392,350, while total bonus reimbursed (reflecting accounting timing and prior deferrals) was $473,530 in 2024 .
- 2024 equity grant: 26,945 OP LTIP Units (grant date 12/12/2024) with grant‑date fair value $332,501; vesting 12,934 on 12/12/2025 and 14,011 on 12/12/2026; OP LTIP Units receive cash dividends equivalent to common and are convertible into OP Units one‑for‑one, redeemable for EFC common shares or cash at EFC’s election (subject to conditions) .
- 2024 dividends on OP LTIP Units: $1.56 per OP LTIP Unit .
Incentive Detail Table (2024)
| Component | Metric/Structure | Target | Actual/Payout | Vesting |
|---|---|---|---|---|
| Discretionary Cash Bonus | Discretionary; no formulaic metrics | N/A | $590,000 (27% deferred to 12/31/2025); EFC reimbursable determined at $392,350; total reimbursed shown in SCT $473,530 | Deferred portion vests 12/31/2025 . |
| OP LTIP Units | Time‑based RSU‑like OP LTIP Units | N/A | 26,945 units; $332,501 grant‑date fair value | 12,934 vest 12/12/2025; 14,011 vest 12/12/2026 . |
Multi‑Year Compensation (as reported by EFC for reimbursed amounts)
| Component ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 225,729 | 249,000 | 206,150 |
| Bonus | 294,650 | 434,595 | 473,530 |
| Stock Awards (Grant‑Date FV) | 266,781 | 311,259 | 332,501 |
| All Other (Dividends on unvested) | 57,231 | 57,666 | 52,708 |
| Total | 844,391 | 1,052,520 | 1,064,889 |
Recent Vesting and Realized Value (2024)
| Vesting Date | Units Vested | Value Realized ($) |
|---|---|---|
| 12/14/2024 | 11,917 | 147,175 |
| 12/15/2024 | 9,954 | 122,932 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 135,453 OP LTIP Units (less than 1% of outstanding) . |
| Shares Outstanding (for % calc) | 94,513,137 as of 4/10/2025 . |
| Ownership as % of Outstanding | ~0.14% (135,453 ÷ 94,513,137), derived from cited figures . |
| Unvested Units (12/31/2024) | 38,861 OP LTIP Units; market value $470,995 at $12.12 . |
| Dividends on OP LTIP Units | $1.56 per unit in 2024 (paid on unvested as well) . |
| Hedging/Short Sales | Prohibited for officers and directors; aligns interests with stockholders . |
| Pledging | Not disclosed; no pledging policy highlighted; hedging/short sales barred . |
| Ownership Guidelines | Not disclosed; EFC states objective to encourage ownership via OP LTIP Units . |
Upcoming Vesting/Potential Selling Pressure Windows
| Date | Units | Source |
|---|---|---|
| 12/12/2025 | 12,934 OP LTIP Units | |
| 12/14/2025 | 11,916 OP LTIP Units | |
| 12/12/2026 | 14,011 OP LTIP Units | |
| 12/31/2025 | Deferred 2024 cash bonus portion (~27%) scheduled to vest |
Note: OP LTIP Units convert into OP Units and are then redeemable for common shares or cash at the Company’s election, which can influence actual secondary‑market selling dynamics .
Employment Terms
| Term | Detail |
|---|---|
| Employer of Record | EMG (external manager); EFC reimburses portion of CFO compensation . |
| Start Date (EFC CFO) | April 2018 . |
| Contract | “Standard” EMG employment contract; no direct EFC agreement for fixed cash comp . |
| Severance Economics | If terminated by EMG other than “cause” or upon CIC: unvested OP LTIP Units remain outstanding and continue to vest; if terminated by EMG other than “cause,” deferred 2024 cash bonus continues to vest per contract (no continuation upon voluntary resignation) . |
| Change‑of‑Control (CIC) | For OP LTIP Units: continue to vest post‑CIC (single‑trigger continuation, not acceleration); CIC definition includes >50% share acquisition, certain M&A transactions, or sale/liquidation scenarios . |
| Clawback | EFC Clawback Policy effective Nov 2, 2023; recoups incentive‑based compensation following restatements for exec officers for amounts received after Oct 2, 2023 . |
| Non‑compete/Non‑solicit | Not disclosed in proxy . |
Performance & Track Record
- 2024 GAAP net income was $148.1 million vs $87.9 million in 2023, indicating substantially improved profitability year‑over‑year .
- Five‑year cumulative TSR (value of a $100 investment from 12/31/2019) was 119.53 in 2024, outperforming the FTSE NAREIT Mortgage REIT Index peer group at 79.96; dividends are included in the TSR series .
- The compensation framework for the CFO explicitly avoids fixed performance formulas, emphasizing discretionary evaluation of contributions and company results, consistent with an external manager structure .
Compensation Committee, Say‑on‑Pay, and Shareholder Feedback
- Compensation Committee: Independent directors; 2024 committee members included Edward Resendez (Chair), Ronald I. Simon, Ph.D., Stephen J. Dannhauser, and Lisa Mumford; the committee reviewed and recommended CD&A inclusion and met nine times in 2024 .
- Say‑on‑Pay: 86% approval at the 2024 annual meeting; EFC conducts annual say‑on‑pay votes .
- Compensation Consultant: None utilized for executive/director compensation determinations .
Investment Implications
- Alignment and retention: Material unvested equity (38,861 OP LTIP Units) with multi‑year vesting and dividends on unvested units supports retention and alignment; hedging and short sales are prohibited, and CIC terms allow continued vesting rather than acceleration .
- Near‑term selling pressure: Two sizable vest dates in December 2025 (12,934 and 11,916 units) plus deferred 2024 cash bonus vesting on 12/31/2025 create potential year‑end liquidity events; however, redemption for common is at the Company’s election and subject to conditions, which can modulate flow‑through to the market .
- Pay‑for‑performance risk: The discretionary nature of CFO bonus/equity (no explicit formulaic financial metrics) places greater weight on committee judgment; investors should monitor consistency of payouts with GAAP profitability, book value trends, and TSR versus peers .
- Change‑in‑control economics: Continuation‑of‑vesting (single‑trigger for equity; termination‑based for cash deferrals) limits windfall accelerations but still preserves value through corporate transitions—a moderate governance outcome for externally managed REITs .
- Execution context: EFC delivered higher GAAP net income in 2024 and outperformed its peer index over five years on TSR, framing a supportive backdrop for compensation outcomes; continued performance versus mortgage REIT peers remains the key screen for payout reasonableness .