Medallion Financial Corp. · NASDAQ:MFIN
Medallion Financial — Proxy Contest (May 2024)
20 slides from Medallion Financial's proxy contest presentation, May 24, 2024
Slide 1: Setting the Record Straight: ZimCal's Response to MFIN's Investor Presentation
Setting the Record Straight: ZimCal’s Response to MFIN’s Investor Presentation (NASDAQ:MFIN) https://www.restoretheshine.com/ May 24, 2024
Slide 2: Disclaimer
Disclaimer Important Information Stephen Hodges and his affiliates, ZimCal Asset Management, LLC, BIMIZCI Fund, LLC and Warnke Investments LLC (collectively, “ZimCal”), have nominated individuals to Medallion Financial Corp.’s board of directors and are soliciting votes for the election of their nom
Slide 3: MFIN Would Like You to Believe Their Story But We Do Not Believe They Are Credible
MFIN Would Like You to Believe Their Story But We Do Not Believe They Are Credible. Andrew Murstein has been charged with violating antifraud...anti-touting provisions...of securities law.
Slide 4: The Reality of MFIN Board: Lacks Independence and Accountability
The Reality of MFIN Board: Lacks Independence and Accountability The Defendant • Defendant in SEC Investigation • Stockholders spent an estimated $7 million defending Mr. Murstein. Andrew Murstein • Board refuses to initiate an independent investigation vs (President and COO) • Age: 59 • Board tenur
Slide 5: MFIN DEF14A Half-Truths/Lies vs Reality
We Knew That MFIN Would Make Numerous Untruthful/Half-Truthful Claims to Distract from ZimCal’s Core Message. The SEC Allegations Shows What They Are Capable Of. MFIN DEF14A Half-Truths/Lies Reality • The SEC suit alleges that that Mr. Murstein lied and committed fraud • ZimCal demanded a payoff to
Slide 6: MFIN Claims vs Reality: Transformation of the Company
MFIN’s Claims “Board and Management have Successfully Transformed the Company…. ” MFIN Claims Reality • 2023 earnings were boosted by $22 million (after tax) from Taxi Record Earnings: In 2023, we had the highest annual Medallion recoveries/gains. Core earnings declined YoY. Taxi total earnings and
Slide 7: MFIN Claims vs Reality: Board is fit for purpose
MFIN’s Claims “Board is fit for purpose” MFIN Claims Reality • MFIN’s ‘board refreshment’ is a flawed one. Two of the three directors - Our Board thoughtfully approaches refreshment, with three Robert Meyer and Brent Hatch - added in the past four years, were independent directors added in the last
Slide 8: MFIN Claims vs Reality: Board is fit for purpose (contd.)
MFIN’s Claims “Board is fit for purpose” (contd.) MFIN Claims Reality David Rudnick is not a good ‘fit’ because: David Rudnick brings a differentiated perspective • Lacks independence: he is the father-in-law of Andrew Murstein from commercial operations leadership, (President and COO). His son, Jef
Slide 9: ZimCal Launched the Proxy Fight to Improve Governance and Leadership
Contrary to MFIN’s Assertions, ZimCal Launched the Proxy Fight to Improve Governance and Leadership, and was Approached by MFIN to Acquire ZimCal’s Debt MFIN Claims Reality • Mr. Hodges never “demanded” that MFIN repurchase his debt. Via a phone call Mr. Hodges is primarily a debtholder and launched
Slide 10: ZimCal Focused on Governance Concerns and Preventing a Repeat of Taxi Medallion Implosion
Contrary to MFIN’s Assertions, ZimCal Has Been Focused on Governance Concerns and Preventing a Repeat of the Taxi Medallion Implosion MFIN Claims Reality • As Mr. Hodges stated in multiple letters and emails to the Company, he was Given that Hodges appeared to be dissatisfied with dissatisfied with
Slide 11: ZimCal Focused on Governance Concerns (contd.)
Contrary to MFIN’s Assertions, ZimCal Has Been Focused on Governance Concerns and Preventing a Repeat of the Taxi Medallion Implosion (contd.) MFIN Claims Reality Mr. Hodges’ debt position creates an obsession with • Excerpts from the same December 12, 2023 email from Stephen downside risk that is m
Slide 12: ZimCal's Interests are Aligned With All Stakeholders
ZimCal’s Interests are Aligned With All Stakeholders MFIN Claims Reality Mr. Hodges is a Conflicted Debt Investor • Unclear what this means since our subordinated debt does not give ZimCal any more rights than stockholders unless Medallion decides to default on their loan. In some ways ZimCal has le
Slide 13: ZimCal Clearly Shared Its Priorities With MFIN
ZimCal Clearly Shared Its Priorities With MFIN: Improve Governance, Leadership, and Resolve the SEC litigation, and the Company Would Have Tremendous Upside MFIN Claims Reality Mr. Hodges demanded that the Company choose • Mr. Hodges did not demand anything except improvements in from four “outcomes
Slide 14: ZimCal's Nominees Have Extensive Leadership and Lending Experience
Contrary to MFIN’s assertions, ZimCal’s Nominees Have Extensive Leadership and Lending Experience MFIN Claims Reality Hodges and Deppisch Lack Relevant Experience • Messrs. Hodges and Deppisch have worked in banking, consumer finance, debt investing, securitizations and other areas for over 40 years
Slide 15: Claiming that Medallion Bank and Nelnet Bank are Competitors is Disingenuous
Claiming that Medallion Bank and Nelnet Bank are Competitors is Disingenuous MFIN Claims Reality Mr. Deppisch works for a competitor (Nelnet Financial • The identity of Nelnet Bank’s officers and directors is publicly available. Services, parent of Nelnet Bank) ZimCal has informed MFIN, and provided
Slide 16: In Conclusion, We Believe MFIN is Resistant to Change and Accountability
In Conclusion, We Believe MFIN is Resistant to Change and Accountability, Because: • If elected, ZimCal’s nominees would demand that the Board address the ongoing SEC investigation, thus creating uncertainty for Andrew Murstein • The change and accountability ZimCal seeks begins with answers to the
Slide 17: Our Concerns with Current Board Composition
Insufficient Director Independence and Lack of Diversity Have Rendered the Family-Led Board Incapable of Holding Management Accountable Our Concerns with Current Board Composition • The Board does not have adequate independent and diverse directors to hold the family-led management team accountable.
Slide 18: Time to Implement an Incentive Plan Based on Pay-for-Core-Performance
It is Time to Implement an Incentive Plan Based on Pay-for-Core-Performance Instead of Self-Enrichment • In the last 5 years, Murstein has been paid $17.0M in cash and been given $5.3M in stock (grant-date value as reported) while generating only $116 million in earnings. This compares poorly to MFI
Slide 19: Turning the Page – We Will Act in the Best Interest of ALL Stakeholders
Turning the Page – We Will Act in the Best Interest of ALL Stakeholders (cont.) • We have distinct expertise in risk management, banking and specialty finance. We are not activists. Rather we are hoping to collaborate with the current Board and bring our experience and knowledge to implement the typ
Slide 20: Our Nominees: Stephen Hodges and Judd Deppisch
Our Nominees Would Ensure that The Board Has the Requisite Experience and Independence to Resolve the SEC Investigation and Avoid a Repeat of Medallion Related Implosion Stephen Hodges Judd Deppisch • Stephen Hodges is the founder of ZimCal Asset Management LLC; ZimCal is the • Judd Deppisch is the