John Mazarakis

About John Mazarakis

Executive Chairman of Chicago Atlantic Real Estate Finance, Inc. (REFI) since inception; director since 2021; age 48; BA in Economics (University of Delaware) and MBA (University of Chicago Booth) . Co‑founded Chicago Atlantic Group in April 2019 and brings 20+ years of entrepreneurial, operational, and managerial experience, including building a 30+ restaurant chain (>1,200 employees), a real estate portfolio of 30+ properties, development of >1 million square feet of commercial real estate, and completing multiple financing transactions . REFI is externally managed and does not disclose executive salary/bonus metrics; performance is framed around portfolio yields and core earnings, with a weighted average loan YTM IRR of 17.2% as of December 31, 2024 .

Past Roles

External Roles

Fixed Compensation

• REFI has no employees; executives are employed and compensated by the external Manager (Chicago Atlantic REIT Manager, LLC). REFI reimburses the Manager for allocable executive compensation (base, bonus, benefits) and pays quarterly base management fees (1.50% annualized on “Equity,” net of 50% of certain origination fees) plus incentive fees tied to Core Earnings above an 8% hurdle, and an automatic annual renewal of the Management Agreement (renewed April 30, 2024) .
• Termination economics: if the Management Agreement is terminated under specified circumstances, REFI owes a termination fee equal to 3× the annualized average quarterly base management fee plus incentive compensation earned over the prior 24 months .

Implication: John’s cash compensation (salary/bonus) flows through the Manager and is not itemized by individual; equity grants are disclosed at the REIT level and are the primary alignment lever .

Performance Compensation

• Award design: Grants are time‑based restricted stock; no disclosed PSU/option awards; the equity plan shows no outstanding options and 670,588 shares remaining available for future issuance as of Dec 31, 2024 .
• Performance metrics: The proxy does not disclose executive‑level bonus metrics (e.g., revenue, EBITDA, TSR) given the external‑manager structure; incentive fees paid to the Manager are based on Core Earnings above an 8% hurdle, which indirectly ties executive variable pay to distributable earnings .

Equity Ownership & Alignment

• Hedging/Pledging: Company policy prohibits short‑term/speculative trading and hedging; pledging is prohibited except non‑margin loans with demonstrated capacity to repay and pre‑approval from General Counsel .
• Ownership guidelines: No explicit director/executive ownership guideline disclosure in the proxy; compliance status not disclosed .
• Insider selling pressure: Time‑based vesting creates potential sellable lots at scheduled anniversaries (Jun 1 annually for 2023 grant; Apr 1 annually for 2024/2025 grants); actual sale activity would be monitored via Form 4, not in proxy .

Employment Terms

• Employment agreement: Individual employment terms for John with REFI are not disclosed; REFI is externally managed, and executive employment resides with the Manager .
• Severance/change‑of‑control: No individual severance or CIC terms disclosed for John; termination economics exist at the Manager contract level (3× average fees) which can influence continuity but do not specify personal severance .
• Clawback, non‑compete, non‑solicit, garden leave, tax gross‑ups: Not disclosed at the individual level; proxy references general code of conduct and governance policies .

Board Governance

• Board role: Executive Chairman (interested director), director since 2021; current term expiring 2025 .
• Independence: Board determined that Papastavrou, Stavola, Konigsberg, and Steiner are independent; John is not independent (Executive Chairman) .
• Committees: Interested directors (including John) are not listed on Audit, Compensation, or Nominating committees; committee membership is entirely independent directors .
• Leadership structure: Executive Chairman (John) plus Lead Independent Director (Papastavrou) to balance oversight; Board asserts structure provides sufficient independent oversight of the Manager .
• Meetings/attendance: 2024 Board met 6 times; Audit 4; Nominating 0; Compensation 1; all incumbent directors attended ≥75% .

Director Compensation

• Policy: Directors who are employees of the Manager (i.e., interested directors such as John) do not receive compensation for Board service .
• Independent director pay (2024): $72,500 cash retainer; lead independent director +$15,000; Audit Chair +$25,000; Compensation Chair +$10,000; Nominating Chair +$5,000; $75,000 stock awards under the 2021 plan; no per‑meeting fees .

Related Party Transactions

• Vireo linkage: Borrowers of Loan #3 and Loan #33 are affiliates of Vireo Growth Inc.; in Dec 2024, John was appointed CEO and Co‑Executive Chairman of Vireo; affiliated funds under common control with the Manager hold material equity interests in Vireo, causing classification as related party .
• New Vireo loan: During Q4 2024, REFI originated a $5.5M loan to a Vireo subsidiary, recorded at fair value; REFI recognized $1.5M in underwriting/structuring fees upon origination .
• Other related transactions: Multiple loan purchases/sales with affiliates under audit committee oversight and at fair value; details include Jan 24, 2023 purchase ($19.3M), Mar 31, 2023 sale ($14.2M), Sep–Oct 2024 conditional assignments/sales ($6.0M), Dec 31, 2024 refinancing ($6.5M) .

Performance & Track Record (Company Context)

• Portfolio scale: 30 borrowers; ~$410.2M total principal, $404.7M held for investment (amortized cost) and $5.5M at fair value; unfunded commitments ~$20.9M .
• Yield/maturity: Weighted average YTM IRR 17.2%; weighted average maturity 2.2 years; strict covenants and diversified collateral .
• Non‑accrual status: Loan #9 placed on non‑accrual in May 2023; complex enforcement path including UCC sale and PA DOH approvals; remains non‑accrual as of Dec 31, 2024; carrying value ~$16.4M .
• Financing: Revolving Loan commitments increased to $110.0M (maturity Jun 30, 2026); Notes Payable $50.0M unsecured at 9% (maturity Oct 18, 2028) .

Compensation Structure Analysis (Alignment Levers)

• Cash vs equity mix: John’s disclosed REFI compensation is primarily equity (time‑vested restricted stock); cash pay is via Manager reimbursement (not itemized), creating indirect alignment via Core Earnings‑based incentive fee mechanics .
• Options to RSUs shift: No option awards disclosed; equity grants are restricted stock under the 2021 plan; remaining plan capacity 670,588 shares as of YE 2024 .
• Guaranteed vs at‑risk pay: Manager incentive fees are at‑risk contingent on Core Earnings exceeding an 8% hurdle; base management fees are fixed on Equity with reductions for outside origination fees .
• Award modifications/repricing: No option repricings disclosed; equity awards reflect time‑based vesting without disclosed performance modifier .
• Discretionary bonuses: Not disclosed at the individual executive level (comp flows through Manager) .

Risk Indicators & Red Flags

• Dual roles/conflicts: John’s dual role (REFI Executive Chairman and Vireo CEO/Co‑Executive Chairman) introduces related‑party exposure (Loans #3/33; new Vireo loan); Audit Committee oversight noted, but potential conflicts merit investor monitoring .
• External management termination fee: 3× fee termination economics raise entrenchment concerns at the Manager level rather than individual executive severance alignment .
• Non‑accrual/credit risk: Ongoing non‑accrual (Loan #9) highlights execution risk in enforcement within cannabis regulatory contexts .
• Hedging/pledging: Hedging prohibited; pledging only allowed with strict pre‑approval, mitigating misalignment, though exceptions exist .
• Section 16 compliance: Company states directors/executives complied during 2024 .
• Say‑on‑pay: Not disclosed in proxy (no employee‑level executive compensation disclosed by REFI due to external management) .

Compensation Committee Analysis

• Committee independence: Compensation Committee comprised solely of independent directors; after the annual meeting, Konigsberg (Chair), Steiner, and Stavola .
• Consultant authority: Committee has sole authority to retain/terminate compensation consultants and oversee incentive/ equity plans .
• Composition changes: Post‑meeting committee refresh adds Stavola, with Konigsberg chairing both Audit and Compensation .

Board Service History and Committee Roles (Director Focus)

Equity Plan Capacity and Instruments

Related Party Loans (Detail Overview)

Investment Implications

• Alignment: John’s sizable equity ownership (2.1%) and ongoing restricted stock vesting align him with shareholders; prohibition on hedging and tight pledging rules further support alignment, though vesting dates are potential liquidity events to monitor for selling pressure .
• Governance checks: Executive Chairman role balanced by a Lead Independent Director and fully independent key committees; John does not sit on Audit/Comp/Nominating committees, which mitigates dual‑role concerns .
• External manager incentives: Core Earnings‑based incentive fee with 8% hurdle drives Manager behavior toward distributable earnings; investors should assess sustainability of high portfolio YTM IRR (17.2%) amid regulatory and enforcement risks, and understand the termination fee entrenchment dynamics .
• Conflicts and execution risk: Vireo‑related loans and John’s leadership role at Vireo create related‑party exposure; Audit Committee oversight is in place, but investors should scrutinize pricing, collateral coverage, and fee capture on such transactions; non‑accrual resolution (Loan #9) underscores process complexity in cannabis .
• Trading signals: Monitor Form 4 activity around vest anniversaries (Jun 1 and Apr 1 tranches) and any changes to hedging/pledging approvals; track committee refresh impacts and independent oversight continuity post‑meeting .