Cairn Homes’ directors to get further €47.6m in shares
Some 27m of so-called founder shares held by directors will be converted into ordinary stock
Three founding directors of Cairn Homes are set to receive a further €47.8 million of ordinary shares in the homebuilder.
The three founding directors of Cairn Homes are set to receive a further €47.6 million of ordinary shares in the homebuilder on the back of a lucrative incentive scheme tied to the group’s flotation three years ago.
The company said on Friday that some 27.1 million so-called founder shares held by the directors would be converted into ordinary shares and listed on the stock market from the middle of August. The shares are currently valued at about €47.6 million, based on Cairn’s closing price in Dublin.
The incentive plan set up at the time of Cairn’s 2015 initial public offering (IPO) allocated 100 million founder shares to the group’s chief executive, Michael Stanley, his brother Kevin, who is the company’s chief commercial officer, and Scottish accountant Alan McIntosh. The scheme allowed for the founder stock to be converted into ordinary stock over the course of seven years, subject to certain performance targets.
The founder shares mechanism was used during the flotation to give the directors some upside for committing assets and investment to the company at the time of the transaction, rather than taking money off the table in June 2015.
The latest transaction means that a total of 80 per cent of the founder shares will have converted by the middle of next month. It suggests that all 100 million founder stock will be switched well before the seven-year lifespan of the plan ends.
The directors cashed in some of their chips last September when they sold 15.65 million shares at €1.70 each for €26.6 million. Following the conversion of the latest batch of founder shares, the three directors will own about €113 million of stock in the company.
A company linked to Mr McIntosh is the biggest beneficiary of the latest stock conversion, and is set to receive 13.6 million of additional shares. Michael Stanley will get almost 9.5 million shares, while Kevin Stanley will receive more than 4 million.
Glenveagh, which last October followed Cairn in becoming the second Irish housebuilder to float in two decades, also set up a founder shares plan for its top executives, chairman John Mulcahy, chief executive Justin Bickle and chief operating officer Steve Garvey. Earlier this month, the three executives received €22.5 million of ordinary shares in the company after the conditions for an initial founder shares conversion were met.