ZimCal Raises Concerns Over Excessive Pay at Medallion Financial

The stock price has dropped 20% year-to-date, yet management continues to receive substantial rewards at the expense of shareholders. The high executive compensation is not in line with the core business performance. ZimCal has sent a letter to shareholders highlighting the excessive compensation practices. Additionally, the updated “5 Steps to Improvement” white paper, aimed at unlocking value at Medallion Financial Corp., is now available at www.restoretheshine.com/5-steps.

ZimCal Asset Management, LLC, along with its affiliates BIMIZCI Fund LLC, Warnke Investments LLC, and Stephen Hodges (collectively “ZimCal”), is one of the largest investors in Medallion Financial Corp. (the “Company” or “MFIN”), holding over $15.58 million in debt and equity investments and having been invested in MFIN for over three years. ZimCal is currently engaged in a proxy contest to replace two Directors on MFIN’s Board of Directors with more highly qualified individuals. ZimCal’s sole investments in MFIN are common stock and debt, with no other MFIN-related securities (e.g., call/put options). ZimCal believes in the need for change and that their nominees are the first step towards significant improvements.

Company insiders control approximately 30% of the stock, so every vote in favor of ZimCal’s nominees is crucial. The strong support from independent stockholders is encouraging. The Company has tried to distract stockholders with speculation about ZimCal’s interests and intentions, leading ZimCal to issue a Cease and Desist letter against recent personal and untruthful attacks. ZimCal views the Company’s desperation as a sign of strong stockholder support for their candidates.


ZimCal sent a letter to stockholders expressing concerns about MFIN’s current compensation structure. They believe the current Board and management team prioritize high compensation for themselves over the stockholders’ interests.

If ZimCal’s nominees are not elected, the Board is likely to maintain the lucrative status quo for the management team. If elected, ZimCal’s nominees will address the excessive compensation structure of MFIN’s President and management team immediately. Key points from ZimCal’s letter include:

  • The Board has paid MFIN’s President, Andrew Murstein, $25 million since 2018 for $77 million in earnings. In contrast, the President of Synchrony Financial, a $117 billion consumer lender, was paid $55 million for $17.3 billion in earnings.
  • Right-sizing management compensation would instantly boost earnings and valuation.
  • MFIN’s President making 66 times more than “rank and file” employees is unjustifiable.
  • Executives should be compensated for core performance only, excluding non-core, non-recurring items (mostly taxi medallion assets).
  • Management should be rewarded for avoiding obvious risks and penalized for ignoring them.
  • The change-in-control provision that would amount to a $14.2 million payout to Mr. Murstein, or 7.5% of 1Q24 market capitalization, is excessive and against stockholders’ interests.

Change must happen now. Stockholders who want fair compensation practices that do not enrich management at their expense need to support ZimCal’s nominees. Even with ZimCal’s two candidates on the Board, they would only represent 25%, but any change is a significant step in the right direction.

Visit www.restoretheshine.com/nominees to learn about ZimCal’s highly qualified nominees.

Vote for ZimCal’s exceptional candidates online or via mail using the WHITE proxy card. Even if you have already voted, you can still vote for ZimCal’s candidates; only your most recent vote will count. Full instructions can be found at www.restoretheshine.com/vote.

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