- Activist investor BIMIZCI nominates three directors to Medallion Financial's board.
- Cites CEO's 2025 SEC judgment and a $4.6 million bonus paid the same year.
- Highlights declining credit quality, with consumer loan charge-offs at 15-year highs.
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BIMIZCI seeks 3 board seats at Medallion Financial, citing governance failures
Activist investor BIMIZCI Fund LLC is seeking to appoint three new directors to the board of Medallion Financial Corp., citing broad governance failures and deteriorating performance at the consumer finance company. BIMIZCI holds 1.83% of Medallion's common stock.
"We believe Medallion Financial Corp. is undervalued and is being held back by a board and leadership team who are not putting stockholders first," BIMIZCI said in a press release. "With your support, we can change Medallion and unlock its potential."
The activist cited a May 2025 Final Judgment in which CEO Andrew Murstein was permanently enjoined for federal securities law violations and paid a $1 million penalty. The board promoted him to CEO five months later, awarding him a $4.6 million bonus for 2025. BIMIZCI also noted five of eight directors will soon be over 80 years old.
The proxy contest comes as Medallion's performance wanes, with first-quarter 2026 earnings marking the lowest since the third quarter of 2020. Stockholders of record as of April 13 will vote on the nominations at the company's annual meeting on June 9, 2026.
Declining Performance
BIMIZCI, which has been invested in Medallion for over five years, expressed concerns over the company's financial trajectory. Analyst consensus projects a 36 percent decline in Medallion's 2026 estimated earnings compared to 2025 actuals. The firm's stock returns have also materially trailed its peer group and the Russell 2000 index, according to the activist.
In its "Restore the Shine" campaign, BIMIZCI pointed to deteriorating credit quality, including consumer loan charge-offs reaching 15-year highs. It also stated that 20 percent of the commercial loan portfolio was non-performing at the end of fiscal year 2025, and a subsidiary had a $73.5 million SBA loan default. Despite these trends, Medallion management received $13 million in compensation in 2025.
The activist investor has nominated John Kiernan, Eric Kelly, and Tim Shanahan, aiming to add experience in banking, regulation, and corporate governance to the board.
The push for a board shake-up represents a critical juncture for Medallion, with the outcome of the June 9 vote potentially leading to significant strategic shifts. BIMIZCI's success could bring an overhaul aimed at mending regulatory relationships and improving shareholder value, while a failure could entrench the current leadership.
This article is for informational purposes only and does not constitute investment advice.
