David Rudnick

About David L. Rudnick

David L. Rudnick (age 84) has served on Medallion Financial’s Board since February 1996. He is President of Rudco Properties, Inc., a real estate and private equity investment firm, and previously served as President of Rudco Industries, Inc., an international manufacturer of machine-readable documents (1963–1986). He holds an A.B. with honors in economics from Harvard University and an M.B.A. from Columbia Business School. He is designated a non-independent director and is the father-in-law of President/COO and director Andrew M. Murstein, which the company discloses in its director biography and independence discussions .

Past Roles

External Roles

Board Governance

• Independence and tenure: Classified as non-independent under Nasdaq standards; Class I director with current term expiring at the 2027 annual meeting; director since 1996 .
• Committees: Chairs the Investment Oversight Committee (IOC), which met four times in 2024. The IOC reviews the non-core managed loan portfolio (including taxi medallion loan modifications), and provides oversight of strategic efforts and potential transactions; membership includes both Mursteins and independent directors. Rudnick is not listed on the Audit, Compensation, or Nominating & Governance Committees (which are fully independent) .
• Attendance and board activity: Board held 11 meetings in 2024; each director attended at least 75% of Board and applicable committee meetings. The board maintains a Lead Independent Director structure (Brent O. Hatch) and holds executive sessions of independent directors .

Fixed Compensation

Director-specific (FY2024):

Performance Compensation

• Annual equity grant policy for non-employee directors: $115,000 in RSUs per year of service (granted under the equity plan; not tied to performance conditions for directors) .
• No director meeting fees or pensions; directors are reimbursed for service-related expenses .

Outstanding awards at FY-end (directors):

Other Directorships & Interlocks

Expertise & Qualifications

• Credentials: A.B. (Harvard, honors in economics); M.B.A. (Columbia).
• Experience: Executive leadership in manufacturing (machine-readable documents), real estate and private equity; prior financial institution board roles. Board bio emphasizes investment and executive management skills .

Equity Ownership

Ownership alignment policies:

• Stock ownership guidelines: Non-employee directors must hold shares equal to 3x annual cash retainer; as of Mar 31, 2025, all directors and officers were in compliance .
• Hedging and margin: Prohibited for covered persons (including directors); options/derivatives trading in company securities (outside plan grants) is banned .
• Pledging: The proxy outlines prohibitions on margin purchases; no specific pledging by Rudnick is disclosed in the proxy’s ownership section .

Insider Trades

Note: Always refer to the SEC Form 4 text for exact transaction codes, share amounts, and footnotes.

Governance Assessment

• Strengths

  • Significant ownership (1.33%) and compliance with director ownership guidelines support alignment with shareholders .
  • Not seated on key independent committees (Audit, Compensation, Nominating & Governance), which remain fully independent as required by Nasdaq—mitigates direct conflicts in oversight of financial reporting and executive pay .
  • Clear anti-hedging policy and recoupment policy strengthen governance framework .

• Concerns / RED FLAGS

  • Non-independent status due to close family relationship with the President/COO and director (Andrew M. Murstein) .
  • Related-party exposure: The company employs “the son of one of the Company’s directors,” Jeffrey Rudnick, as SVP with detailed annual compensation; this requires robust board-level related-party oversight under company policy .
  • Long tenure (since 1996) can raise questions about independence of judgment over time, particularly given family ties .
  • Investment Oversight Committee, which Rudnick chairs, includes both Mursteins and non-independent members. While appropriate for legacy/non-core portfolios, this composition warrants attention to potential conflicts when considering strategic transactions .

• Shareholder sentiment signal

  • Non-binding say-on-pay approval was 73.4% in 2024, indicating moderate, but not overwhelming, investor support for compensation practices—relevant context for overall governance credibility though not specific to director pay .

Director Compensation (Detail)

Program notes for directors:

• RSU grants to non-employee directors target $115,000 per year; no mandatory option grants; no pension/retirement plans for non-employee directors; expense reimbursement provided .

Related Party Transactions (Focused)

• Jeffrey Rudnick (son of a director) — Senior Vice President compensation: 2024 salary $260,988; annual cash bonus $75,000; equity bonus $50,000; salary increased to $269,000 effective Jan 1, 2025. Company maintains a Related and Affiliated Party Transactions Policy requiring Board briefing and approval for such transactions .

Compensation Structure Analysis (Directors)

• Cash vs. equity: Rudnick’s 2024 mix was roughly 46% cash ($102,000) and 52% equity (RSUs fair value $115,006), plus subsidiary director fees ($6,000). Annual IOC Chair fee was reduced from $43,000 to $31,000 as of July 1, 2024, lowering cash compensation for that role going forward .
• No meeting fees or pensions; equity awarded as time-based RSUs rather than options, aligning with prevailing governance practices for directors .

Equity Ownership & Alignment Policies

• Stock ownership guidelines for non-employee directors: 3x annual cash retainer; all directors in compliance as of March 31, 2025. Prohibitions on short sales, margin purchases, and company-derivative transactions by covered persons; clawback policy adopted and aligned with Nasdaq Rule 5608 .

Notes on Committee Composition (Company-wide context)

• Audit Committee: Independent-only, 11 meetings in 2024; Chair: Robert M. Meyer; all members designated “audit committee financial experts” .
• Compensation Committee: Independent-only; Chair: Allan J. Tanenbaum; engaged Meridian as independent consultant with no conflicts .
• Nominating & Governance: Independent-only; Chair: Cynthia A. Hallenbeck; 2 meetings in 2024 .
• Investment Oversight: Ad hoc; Chair: David L. Rudnick; 4 meetings in 2024; oversees non-core portfolios and strategic reviews .

Overall implication: Rudnick’s deep company familiarity and ownership are positives for alignment, but his non-independence and family interlocks are material governance considerations. The board’s maintenance of independent oversight on key committees mitigates some risks, while related-party employment and IOC composition require ongoing scrutiny and robust disclosure .