Key Takeaways:
(New York) — Activist investor BIMIZCI nominated three directors to Medallion Financial’s board, after crossing a 500,000 share threshold to protest the company’s lagging performance and governance.
"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 stated in its definitive proxy statement filed on May 8.
The activist firm, which holds 500,205 shares, or 2.1% of the company, highlighted that Medallion’s stock lags peers and the Russell 2000 over one, two, five, and 10-year periods. BIMIZCI also pointed to a federal securities fraud judgment against CEO Andrew Murstein, who was promoted and received a $4.6 million bonus five months after the judgment. Medallion's valuation multiples, including a price-to-tangible book value of 0.80x, are significantly below peers.
The proxy contest, which culminates at the June 9 annual meeting, puts Medallion's board composition and executive compensation directly in focus. A successful campaign by BIMIZCI could lead to significant changes in strategy and governance, including the potential for annual elections for all board members, a change from the current staggered system.
In its "Restore the Shine" campaign, BIMIZCI, one of Medallion's largest investors for over five years, detailed what it calls a failure of board accountability. The firm noted that five of Medallion's eight board members are over 80 years old and that executives were paid $13 million in 2025 despite consumer loan charge-offs reaching 15-year highs.
BIMIZCI has nominated Eric Kelly, John Kiernan, and Tim Shanahan to the board, citing their experience in banking, regulation, and technology. The firm argues Medallion is unprepared for competition from fintech lenders, comparing its technology to "a Motorola flip phone competing against an iPhone."
The activist also criticized shareholder-unfriendly rules, such as a requirement for 75% of voting stock to change corporate bylaws, which it deems "effectively impossible" given insider ownership. Furthermore, a "change-in-control" could trigger payments of $20.2 million to the top five executives.
The campaign represents a new step for BIMIZCI's principal, who has never previously been an activist investor. The firm is urging shareholders of record as of April 13 to vote the BLUE proxy card for its nominees.
This proxy battle places a spotlight on the governance practices at Medallion Financial. Investors will be watching the outcome of the June 9 vote to see whether the board will be reshaped by the activist's nominees.
This article is for informational purposes only and does not constitute investment advice.
