Andrew Murstein
MEDALLION FINANCIALAbout Andrew Murstein
Andrew M. Murstein (age 60) is President, Chief Operating Officer, and Director of Medallion Financial Corp (MFIN); he will become Chief Executive Officer effective January 31, 2026, with Alvin Murstein transitioning to Executive Chairman through May 2027 . He has been employed at Medallion since 1996 under long-standing employment agreements, amended multiple times (1998, 2017, 2017, 2023; Amendment No. 4 in 2025) . Company performance and incentives: 2024 STI corporate targets included Net Income ($35.50M target vs $35.88M actual), ROE (10.03% target vs 10.12% actual) and other segment metrics; Andrew’s overall 2024 STI payout was 114.76% of target, paying $2,052,911 . Reported net income was $35.88M in FY2024 vs $55.08M in FY2023 and $43.84M in FY2022, reflecting lower year-over-year net income in 2024 vs 2023; quarterly net income in 2025 was $7.76M (Q3), $11.07M (Q2), $12.01M (Q1) . Strategic narrative: management highlights pivot away from taxi medallion lending to a diversified specialty finance platform with record earnings and assets; taxi medallions represent well under 1% of assets .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Medallion Financial Corp. | President & Chief Operating Officer | 1996–present (employment since 1996; role dates not fully disclosed) | Led pivot from taxi medallion lending to diversified consumer/commercial lending; supported record earnings/assets and fintech origination; succession to CEO announced |
External Roles
- Not disclosed in the latest proxy or recent filings; no public company directorships or external board roles identified .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,084,164 | 1,084,164 | 1,084,164 |
| All Other Compensation ($) | 77,327 | 72,232 | 72,738 |
| Notes | — | — | Includes car lease ($45,590) and 401(k) match ($13,800) plus garage/car insurance/maintenance |
- No base salary increases for NEOs in 2024; Andrew’s salary remained $1,084,164 .
Performance Compensation
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| 2024 Short-Term Incentive (STI) – Overall | — | Target incentive 165% of base salary | Scorecard 114.76% of target | $2,052,911 | Cash award paid per STI plan |
| STI Framework – Corporate Metrics | — | Net Income $35.50M; ROE 10.03% | Net Income $35.88M; ROE 10.12% | Contributed to 114.76% payout | Annual cash STI |
| 2024 Long-Term Incentive (LTI) Mix | 50% RSAs / 50% PSUs | — | — | RSAs grant-date fair value $894,436; PSUs grant-date fair value $894,436 | RSAs vest ratably in 1/3 tranches; PSUs vest after 3-year period with Committee certification |
| PSU Performance Metric 1 | 50% | 3-year cumulative PTI: Target $192,000K; Threshold $134,400K; Max $249,600K | Not yet certified | 0–200% of target based on achievement | Performance period ends Dec 31, 2026 |
| PSU Performance Metric 2 | 50% | 3-year avg ROE: Target 11.00%; Threshold 7.70%; Max 14.30% | Not yet certified | 0–200% of target based on achievement | Performance period ends Dec 31, 2026 |
| Equity Grants Detail (2024) | Grant Date Fair Value ($) | Number of RSAs | Target PSUs (#) |
|---|---|---|---|
| Andrew M. Murstein | 1,788,872 total (RSAs $894,436; PSUs $894,436) | 99,714 | 99,714 |
- Performance stock units pay out 0–200% of target based on PTI and ROE; vesting requires continued employment through certification following Dec 31, 2026 .
- Hedging policy prohibits short sales, margin purchases, and trading in company-based derivatives; option grants are allowed only under company plans .
- Equity grant timing has no coordination with MNPI; options not granted around material filings in 2024 .
Equity Ownership & Alignment
| Ownership Component | Amount | Notes |
|---|---|---|
| Total Beneficial Ownership (shares) | 2,617,900 | 11.10% of outstanding |
| Directly Held Common | 589,362 | — |
| Andrew Murstein Family Trust | 1,481,963 | Andrew is trustee and beneficiary |
| Restricted Common Stock | 197,826 | Time-based; subject to vesting |
| Options – Common Stock Issuable | 348,749 | Options counted if exercisable within 60 days as per SEC beneficial ownership rules |
| PSUs Outstanding (incl. dividend equivalents) – 2025 cycle | 161,517 | Subject to vesting based on performance as of Dec 31, 2025 |
| PSUs Outstanding – 2026 cycle | 105,982 | Subject to vesting Dec 31, 2026 |
| PSUs Outstanding – 2027 cycle | 191,287 | Subject to vesting Dec 31, 2027 |
| Options Unvested (as of 12/31/24) | 28,680 | Exercise price $6.79; value $74,568 using $9.39 stock price on 12/29/24 |
- Stock Ownership Guidelines: Tier 1 executives (CEO/President) must hold shares equal to 5x base salary; all officers and directors were in compliance as of March 31, 2025; 50% of net shares from awards must be retained until in compliance .
- Hedging/pledging: Hedging and margin purchases prohibited; plan restricts award transferability/pledging, but no explicit disclosure of any shares pledged by Andrew .
Employment Terms
| Term | Detail |
|---|---|
| Employment Agreement History | First Amended & Restated Employment Agreement dated May 29, 1998; amended Apr 27, 2017; Dec 22, 2017; Apr 27, 2023; Amendment No. 4 dated Oct 24, 2025 |
| Title/Role Transition | Effective Jan 31, 2026, Andrew becomes President, CEO, and COO for the remainder of his term |
| Current Term & Auto-Renewal | Term revised to end May 28, 2027; on May 29, 2024 and each May 29 thereafter, auto-renews annually for a three-year term unless either party gives ≥30 days’ notice in the first year of the then term |
| Base Salary Review | Reviewed annually; may be increased, not decreased, by Compensation Committee |
| Non-Compete/Non-Solicit | During employment and for one year thereafter |
| Severance (Without Cause/Good Reason) | Lump sum equal to average of salary + bonus + fringe benefits for prior 3 years multiplied by fractional years remaining in term; acceleration of unvested options; reimbursement of damages/legal fees |
| Excise Tax Cutback | If net after excise and income taxes does not exceed 110% of threshold, payments are reduced to avoid excise tax |
| Potential Payments (Assumed on 12/31/24) | Severance $9,308,222; other benefits (option vesting value) $74,568—same amounts under change-of-control with termination or good reason |
| Equity Award Acceleration (Plan) | Double-trigger for assumed/substituted awards: no acceleration solely on change-in-control unless involuntary termination within two years; Committee may accelerate/assume/cash-out awards in corporate events |
Board Governance
- Board Service: Andrew is a Director (Class II standing for election in 2025) and a non-independent director under NASDAQ standards .
- Committee Roles: Member of Investment Oversight Committee (alongside Alvin Murstein, Everets, Hallenbeck, Hatch, Rudnick (Chair), Tanenbaum); met four times in 2024 .
- Lead Independent Director: Company provides a $20,000 annual fee for Lead Independent Director; independent directors receive defined cash retainers and RSU grants; employee directors (including Andrew) receive no additional director compensation .
- Dual-Role Implications: Effective Jan 31, 2026, Andrew will serve as CEO while remaining a director; Chair role will be held by Executive Chairman (Alvin Murstein), maintaining separation of CEO and Chair but with family leadership continuity—Board emphasizes independent Compensation Committee with executive sessions and independent consultant (Meridian) .
Director Compensation (Context)
| Role | Annual Cash | Equity Grant |
|---|---|---|
| Non-Employee Director Base Retainer | $65,000 | $115,000 RSUs (annual) |
| Committee Chair – Audit | $22,500 | — |
| Committee Chair – Compensation | $15,000 | — |
| Committee Chair – Nominating & Governance | $11,000 | — |
| Committee Chair – Investment Oversight | $31,000 | — |
| Committee Member – Audit | $10,000 | — |
| Committee Member – Compensation | $7,750 | — |
| Committee Member – Nominating & Governance | $6,000 | — |
| Committee Member – Investment Oversight | $20,000 | — |
| Lead Independent Director | +$20,000 | — |
- Employee directors (including Andrew) receive no separate board compensation .
Compensation & Ownership Tables
Summary Compensation (Andrew M. Murstein)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 1,084,164 | 1,084,164 | 1,084,164 |
| Stock Awards ($) | 1,204,700 | 1,788,875 | 1,788,872 |
| Non-Equity Incentive ($) | 2,404,205 | 3,543,667 | 2,052,946 |
| All Other Compensation ($) | 77,327 | 72,232 | 72,738 |
| Total ($) | 4,770,396 | 6,488,938 | 4,998,720 |
2024 STI Targets and Outcome (Andrew)
| Item | Value |
|---|---|
| Target Incentive (% of Base) | 165% |
| Scorecard Payout (% of Target) | 114.76% |
| Actual Payout ($) | $2,052,911 |
2024 LTI Grant Detail (Andrew)
| Component | Grant-Date Fair Value ($) | Units |
|---|---|---|
| RSAs | 894,436 | 99,714 |
| PSUs (Target) | 894,436 | 99,714 |
PSU Performance Curve (3-year period ending 12/31/2026)
| Measure | Weight | Threshold | Target | Max | Earned (% of Target) |
|---|---|---|---|---|---|
| Cumulative PTI ($000s) | 50% | 134,400 | 192,000 | 249,600 | 0–200% |
| Avg ROE (%) | 50% | 7.70% | 11.00% | 14.30% | 0–200% |
Beneficial Ownership (Andrew)
| Category | Shares |
|---|---|
| Total Beneficial Ownership | 2,617,900 (11.10%) |
| Family Trust | 1,481,963 |
| Direct Common | 589,362 |
| Restricted Common | 197,826 |
| Options (issuable within 60 days) | 348,749 |
| PSUs outstanding (2025 cycle) | 161,517 |
| PSUs outstanding (2026 cycle) | 105,982 |
| PSUs outstanding (2027 cycle) | 191,287 |
| Unvested Options (12/31/24) | 28,680 @ $6.79; value $74,568 at $9.39 |
Company Performance Context
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Net Income ($) | 43,840,000 | 55,079,000 | 35,878,000 |
| EBITDA ($) | 109,264,000* | 154,225,000* | 160,320,000* |
| Note | — | — | Values retrieved from S&P Global* |
| Metric | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
|---|---|---|---|---|---|---|---|---|
| Net Income ($) | 14,318,000 | 10,024,000 | 7,101,000 | 8,611,000 | 10,142,000 | 12,014,000 | 11,069,000 | 7,763,000 |
Compensation Structure Analysis
- Equity-heavy mix: 2024 equity awards were 50/50 RSAs/PSUs; PSUs tied to PTI and ROE across 3 years, aligning pay with profitability and capital efficiency .
- Cash vs equity trend: 2024 total compensation declined vs 2023 as non-equity incentive fell; equity award fair value remained high, signaling continued long-term orientation .
- Governance guardrails: No option repricing without shareholder approval; clawback policy compliant with SEC/NASDAQ rules; independent Compensation Committee with Meridian as independent advisor .
- Dilution/burn rate overhang: Three-year average burn rate 3.04%; 2024 burn rate 2.91%; plan amendment raises potential dilution to ~18.20%, a consideration for equity grant capacity and overhang .
Related Party Transactions & Policies
- Related party employment: Director’s son (Jeffrey Rudnick) employed as SVP, with disclosed salary/bonuses/equity; Board maintains policy requiring briefing and approval for related party transactions given higher conflict risks .
- Regulatory constraints: SBA and bank affiliate restrictions apply to subsidiary transactions; prior exemptive relief requires SBA approvals for portfolio transactions among affiliates .
Risk Indicators & Red Flags
- Severance magnitude: Potential severance of $9.31M for Andrew (plus option vesting value) may create pay-for-failure optics if triggered without strong performance; excise tax cutback applies .
- Equity overhang: Potential dilution up to ~18.20% post plan amendment is meaningful; monitor grant pacing vs performance .
- Hedging/derivatives ban: Strong alignment signal; no explicit pledging disclosures found for Andrew—continue monitoring proxy and Form 4 filings for any pledging .
Compensation Peer Group & Oversight
- Committee independence: Compensation Committee composed solely of independent directors; meets in executive session; uses Meridian as independent consultant; management provides inputs but not present for approvals of their own pay .
- Stock ownership guidelines: 5x salary for Tier 1 executives; compliance affirmed as of March 31, 2025; 50% net shares from awards retained until guideline met .
Employment & Change-of-Control Economics
| Scenario (as of 12/31/24) | Severance ($) | Other Benefits ($) | Key Terms |
|---|---|---|---|
| Termination Without Cause | 9,308,222 | 74,568 | Lump sum formula; option acceleration; legal fee reimbursement; 1-year non-compete/non-solicit |
| Good Reason (No CoC) | Not separately disclosed for Andrew | — | Follows severance formula under agreement |
| CoC + Termination/Good Reason | 9,308,222 | 74,568 | Plan’s double-trigger limits acceleration absent termination; Committee retains discretion in corporate events |
Board Service History & Dual-Role Implications
- Tenure & classification: Andrew is a Class II Director; non-independent; continues board service while ascending to CEO on Jan 31, 2026 .
- Committees: Investment Oversight Committee member; committee met 4 times in 2024; chair is non-independent director (Rudnick) .
- Independence considerations: CEO + Director structure with Executive Chairman (family) may increase perceived influence; mitigants include independent committees, lead independent director structure, and explicit governance policies .
Investment Implications
- Alignment: High ownership (11.10%), strict ownership guidelines, and a ban on hedging/derivatives support alignment; PSUs tied to PTI/ROE drive multi-year profitability/capital returns focus .
- Retention vs overhang: Auto-renewing 3-year term and sizable severance reduce near-term turnover risk; however, equity burn rate and potential dilution (18.20%) merit watch as an overhang vs grant discipline .
- Succession & execution risk: CEO transition effective Jan 31, 2026 with continuity in strategy; leadership highlights diversification and fintech partnerships; monitor 2026 PSU certification outcomes and quarterly net income trajectory for pay-for-performance validation .
- Trading signals: Upcoming CEO role plus high PSU overhang could lead to event-driven insider transactions (e.g., tax withholding on vesting); keep Form 4 surveillance for RSU/PSU settlements and any 10b5-1 plan updates; current policies discourage opportunistic timing of grants .