ELLINGTON FINANCIAL INC (EFC)
Sector: Financials
2026 Annual Meeting Analysis
ELLINGTON FINANCIAL INC · Meeting: May 28, 2026
Directors FOR
5
Directors AGAINST
0
Say on Pay
FOR
Auditor
FOR
Director Elections
Election of Directors
Dr. Simon has served since 2007, has deep finance expertise, passes all independence and attendance requirements, and EFC's 3-year total return of +51.0% outpaces the REM — iShares Mortgage Real Estate ETF benchmark by +14.5 percentage points, well below the 65-point threshold needed to trigger a vote against.
Mr. Penn is the CEO and has served since inception; as an executive director he is subject to the same TSR test, but EFC's strong positive 3-year return outperforms REM — iShares Mortgage Real Estate ETF by only +14.5 percentage points, far below the 65-point trigger, so no TSR concern arises.
Mr. Resendez has served since 2007, brings extensive mortgage lending operational experience, is independent, attended all required meetings, and EFC's outperformance versus REM — iShares Mortgage Real Estate ETF does not come close to the threshold that would trigger a vote against.
Ms. Mumford has served since 2018, is a Certified Public Accountant and former CFO of the company providing strong financial expertise, is independent, attended all required meetings, and EFC's TSR does not trigger the REM — iShares Mortgage Real Estate ETF underperformance threshold.
Mr. Dannhauser has served since January 2021, brings extensive legal and governance expertise, is independent, attended all required meetings, and EFC's 3-year TSR versus REM — iShares Mortgage Real Estate ETF falls well within acceptable bounds.
All five directors pass the policy screens: EFC's 3-year price return of +51.0% outperforms REM — iShares Mortgage Real Estate ETF (+36.5%) by only +14.5 percentage points, well below the 65-point threshold required to trigger a vote against for a company with a strong positive absolute return. No overboarding, attendance failures, independence concerns, or familial relationship issues were identified for any nominee.
Say on Pay
✓ FORCEO
JR Herlihy
Total Comp
N/A
Prior Support
87%%
EFC is externally managed, meaning the CEO (Laurence Penn) receives no direct compensation from the company; the only executives whose pay is directly reimbursed by EFC are the CFO (JR Herlihy, total $1,152,224) and the Chief Accounting Officer (Christopher Smernoff, total $677,935). The prior year say-on-pay vote received 87% shareholder support, well above the 70% threshold of concern. Pay mix includes meaningful equity components in the form of partnership unit awards with multi-year vesting, and the compensation structure is appropriate given the externally managed nature of the company and the partial time these officers dedicate to EFC's affairs.
Auditor Ratification
✓ FORAuditor
PricewaterhouseCoopers LLP
Tenure
N/A
Audit Fees
$4,280,338
Non-Audit Fees
$24,127
Non-audit fees (tax fees of $20,000 plus other fees of $4,127, totaling approximately $24,127) represent less than 1% of audit-related fees ($4,280,338 combining core audit and audit-related fees), far below the 50% threshold that would raise independence concerns; PwC is a Big 4 firm appropriate for a $1.6 billion company; auditor tenure was not disclosed but the policy defaults to FOR when tenure cannot be confirmed; no material restatements were identified.
Overall Assessment
This is a straightforward annual meeting ballot for an externally managed mortgage REIT; EFC's strong 3-year total return of +51.0% outperforms the REM — iShares Mortgage Real Estate ETF benchmark by +14.5 percentage points, well below any vote-against threshold, supporting FOR votes across the entire director slate. The compensation structure is unusual due to external management — only the CFO and Chief Accounting Officer receive company-reimbursed pay — and with 87% prior-year say-on-pay support and appropriate pay design, a FOR vote on executive compensation is warranted.