Alvin Murstein
MEDALLION FINANCIALAbout Alvin Murstein
Alvin Murstein is Chairman, Chief Executive Officer, and Director of Medallion Financial Corp. (MFIN). He is 90 years old, holds a B.A. and an M.B.A. from New York University, and has served as Chairman since the company’s founding in 1995 and CEO since February 1996; he has also led Medallion Funding LLC since 1979, with over 60 years of executive experience in the taxicab industry . Under his leadership in 2024, MFIN reported net income of $35.9 million (EPS $1.52), 8% growth in net interest income, 12% loan growth to $2.5B, 11% asset growth to $2.9B, a 10% dividend increase to $0.11 per quarter, and repurchased 570,404 shares for $4.6M at $8.07/share . Company TSR (value of $100 investment) measured $152 in 2022, $218 in 2023, and $147 in 2024, alongside net income of $43.84M (2022), $55.08M (2023), and $35.88M (2024) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Medallion Financial Corp. | Chairman; Chief Executive Officer; Director | Chairman since 1995; CEO since Feb 1996 – present | Founding leadership; deep knowledge of commercial and taxi medallion financing businesses |
| Medallion Funding LLC (f/k/a Medallion Funding Corp.) | Chairman & CEO | Since 1979 – present | Leadership of historical taxi medallion lending business |
| Strober Organization, Inc. | Director | 1988–1997 | Public company governance exposure (building supply) |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Parker Jewish Institute for Health Care and Rehabilitation | Trustee | Not disclosed (current) | Non-profit trustee role |
Fixed Compensation
- None of the NEOs, including Alvin Murstein, received a base salary increase in 2024 .
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 890,696 | 926,324 | 926,324 |
Multi-year summary compensation (SCT):
| Component ($) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary | 890,696 | 926,324 | 926,324 |
| Stock Awards (grant date fair value) | 330,839 | 398,319 | 398,319 |
| Non-Equity Incentive Plan Compensation (Annual bonus) | 1,173,427 | 1,611,804 | 1,154,750 |
| All Other Compensation | 95,270 | 101,593 | 115,245 |
| Total | 2,490,232 | 3,038,040 | 2,594,638 |
Performance Compensation
Short-Term Incentive (STI) – 2024
- STI target as % of base salary: 87% .
- Scorecard weighted payout: 143.28% of target; Actual STI payout: $1,154,735 .
2024 CEO STI metrics and outcomes:
| Category | Metric | Weight | Target | Actual | % of Target Earned |
|---|---|---|---|---|---|
| Corporate | Net Income Attributable to Shareholders ($M) | 20% | 35.50 | 35.88 | 102.1% |
| Corporate | Diluted EPS ($) | 20% | 1.43 | 1.52 | 112.5% |
| Corporate | Return on Shareholders’ Equity (%) | 20% | 10.03% | 10.12% | 101.8% |
| Corporate | Asset Growth (%) | 20% | 7.14% | 10.85% | 200.0% |
| Strategic | Medallion Portfolio Cash Received ($M) | 20% | 9.10 | 12.06 | 200.0% |
| Result | Weighted % of Target Earned | — | — | — | 143.28% |
| Payout | STI Payout ($) | — | — | — | $1,154,735 |
STI plan notes:
- Plan allows 0–200% payout of target based on predefined goals across corporate, strategic, and segment metrics; 2024 metrics emphasize earnings, EPS, ROE, asset growth, and portfolio cash collections, correlating with shareholder value drivers .
Long-Term Incentive (LTI) – structure, 2024 grants, and metrics
- LTI awards are 50/50 time-based restricted stock awards (RSAs) and performance stock units (PSUs); 2024 CEO target LTI value was 87% of base salary .
- 2024 CEO grants: 22,203 RSAs (GDFV $199,160) and 22,203 PSUs (GDFV $199,160) at target; PSUs can pay 0–200% of target based on performance over a 3-year period (ending 12/31/2026) .
- Vesting: RSAs vest ratably one-third on March 1 of 2025, 2026, and 2027 (service-based); PSUs vest upon Compensation Committee certification post-12/31/2026, subject to continuous employment .
PSU performance curve (3-year period ending 12/31/2026):
| Metric (50/50 weighting) | Threshold | Target | Max | PSUs Earned (% of Target) |
|---|---|---|---|---|
| 3-yr Cumulative Pre-Tax Income (PTI, $000s) | 134,400 | 192,000 | 249,600 | 50% / 100% / 200% |
| 3-yr Average ROE (%) | 7.70% | 11.00% | 14.30% | 50% / 100% / 200% |
Outstanding equity awards as of 12/31/2024 (CEO):
| Award Type | Quantity | Terms / Price | Expiration | Market/Value Reference |
|---|---|---|---|---|
| Unvested RSAs (2024 grant) | 22,203 | Time-based (1/3 each March 1, 2025–27) | — | $208,486 market value using $9.39 on 12/31/2024 |
| Unvested PSUs (2024 grant) | 17,477 | Performance-based through 12/31/2026 | — | $164,104 market value at $9.39 |
| Other unvested PSUs | 53,270 | Performance-based (prior cycles) | — | $500,201 market value at $9.39 |
| Other unvested RSAs | 16,432; 14,359 | Time-based | — | $154,296; $134,831 market values at $9.39 |
| Stock Options (exercisable/unexercisable) | 23,629 / 7,876 | $6.79 | 3/4/2031 | — |
| Stock Options (exercisable) | 37,161 | $6.68 | 2/17/2030 | — |
| Stock Options (exercisable) | 34,899 | $6.55 | 3/21/2029 | — |
Notes on selling pressure:
- RSAs vesting on March 1, 2025, 2026, and 2027 create predictable windows of potential insider selling pressure; PSU certification after 12/31/2026 is another potential liquidity event .
- Insider trading policy prohibits hedging transactions, derivatives, and margin purchases in company securities, mitigating misalignment risks (hedging/pledging), although explicit pledging disclosures are not provided in the proxy .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 1,851,868 shares (7.93% of common as of 4/14/2025) |
| Ownership guidelines | Tier 1 executives (CEO/President) required to hold 5x annual base salary; directors 3x annual cash retainer |
| Hedging/pledging | Insider policy prohibits short sales, derivatives, hedging transactions, and margin purchases |
| Say-on-Pay support | 73.4% approval at 2024 annual meeting |
Equity plan overhang and capacity (as of 3/31/2025):
| Metric | Value |
|---|---|
| Stock options outstanding (weighted avg exercise $6.51; 4.85 years remaining) | 889,928 |
| Full-value awards outstanding (RSAs/RSUs/PSUs at target) | 1,890,502 |
| Shares available for grant (reflects PSUs at max in reserve) | 399,439 |
| Shares outstanding (record date) | 23,234,596 |
| Plan amendment (2025 proposal) | +2,000,000 shares authorized for issuance under the plan |
Employment Terms
- Contract term and renewal: Original agreements (1996, amended 1998; amended April and December 2017). In April 2023, Alvin Murstein elected not to renew; his term expires May 28, 2027 unless terminated earlier per agreement .
- Non-compete/non-solicit: During employment and for one year post-termination .
- Severance (termination without cause or resignation for good reason): Lump sum equal to the average of salary, bonus, and value of fringe benefits for the prior three fiscal years, multiplied by the number of full and partial years remaining in the term at termination; payment of other damages (including legal fees) and acceleration of vesting of any unvested options .
- Change-of-control (excise tax cutback): If payments would trigger excise tax and the net amount retained does not exceed 110% of the excise tax threshold, the company reduces payments to avoid excise tax (i.e., no gross-up; cutback applies) .
Board Governance & Roles (including dual-role implications)
- Board composition and independence: 8 directors, 5 independent under NASDAQ; Alvin Murstein (CEO/Chairman) and Andrew M. Murstein (President/COO) are non-independent; David L. Rudnick is also non-independent .
- Dual role: CEO also serves as Chairman. The Board maintains a Lead Independent Director (created in 2022; currently Brent O. Hatch) with defined responsibilities to coordinate independent director activities, set agendas with the Chair, preside over executive sessions, and engage shareholders .
- Committees: All independent—Audit (Everets, Hallenbeck, Hatch, Meyer; Chair: Meyer), Compensation (Everets, Meyer, Tanenbaum; Chair: Tanenbaum), Nominating & Governance, Investment Oversight; committee members meet NASDAQ and SEC independence requirements .
- Meetings and attendance: Board held 11 meetings in 2024; each director attended at least 75% of board and committee meetings; all directors attended the prior annual meeting .
- Family relationships: Alvin is the father of Andrew M. Murstein; David L. Rudnick (director) is Andrew’s father-in-law—an independence consideration, though a majority of the Board is independent .
Director compensation context:
- Employee directors (including Alvin Murstein) receive no additional board compensation .
- Non-employee directors: annual cash (base $65,000; committee and LID retainers as specified) plus $115,000 RSUs per year (effective July 1, 2024) .
Performance & Pay Alignment Snapshot
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Net Income ($) | 43,840,000 | 55,079,000 | 35,878,000 |
| TSR Value of $100 Investment ($) | 152 | 218 | 147 |
Management and compensation practices:
- Best practices include stock ownership guidelines, recoupment (clawback) policy for restatements, independent compensation consultant, prohibition on option repricing without shareholder approval, and no dividends on unvested awards .
Investment Implications
- Alignment and retention: High direct ownership (1.85M shares; ~7.93%) plus multi-year RSA/PSU vesting supports alignment but creates known potential selling windows around March 1, 2025–2027 (RSAs) and post-2026 PSU certification . STI target and LTI target each at 87% of base salary emphasize pay at risk; CEO STI paid at 143% of target in 2024 on earnings/EPS/ROE/asset growth outperformance .
- Governance risk: Combined CEO/Chair, familial relationships on the board (with Andrew M. Murstein and David L. Rudnick) elevate independence concerns, partially mitigated by a majority-independent board, fully independent committees, and a Lead Independent Director with strong authorities .
- Change-in-control economics: Severance formula based on remaining term-years times average prior 3-year pay (salary+bonus+fringe) could be sizable mid-term; no excise tax gross-up (cutback applies) is shareholder-friendly .
- Dilution/overhang: Equity plan overhang is meaningful (1.89M full-value awards and 0.89M options outstanding; 0.40M shares available), with a proposed +2.0M share increase—watch for dilution versus performance delivery .
- Shareholder sentiment: 73.4% Say-on-Pay support in 2024 is acceptable but below best-in-class; the company cites ongoing plan enhancements (e.g., PSUs) responsive to investor feedback .
- Business momentum vs TSR: 2024 operating achievements (record interest income, loan originations >$1B, dividend hike, buybacks) contrast with lower TSR value vs 2023, emphasizing the importance of sustained ROE and PTI delivery to support PSU outcomes and market rerating .
Overall: Compensation design ties cash and equity to core drivers (earnings, ROE, asset growth, PTI) with robust ownership and clawback policies. Key watch items are dual-role/family governance optics, equity overhang/dilution, the scale of potential severance under remaining term, and execution against 3-year PTI/ROE PSU targets through 2026.
Citations: