Gluskin Sheff’s co-founders have been slowly cashing out

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You've probably heard that Gluskin Sheff + Associates decided against a sale, for now. What you may not know is that the company's co-founders have been quietly winding down their positions in the company.

Since the company's initial public offering in 2006, Ira Gluskin and Gerald Sheff have cashed in the majority of their shares, ensuring that they weren't left beholden to the terms put forward by any bidders who came their way.

Before the initial public offering, each man owned roughly eight million multiple voting shares. Today Mr. Sheff owns four million voting shares and Mr. Gluskin owns three million voting shares.

Yet even after selling more than half of their positions, and despite handing over the reins to chief executive officer Jeremy Freedman and chief investment officer Bill Webb in 2009, the two men still control the company's fate. Their combined seven million voting shares amount to more than half the 12.6 million voting shares outstanding.

During the IPO, each man sold 2.1 million shares to new investors for $18.50 a share, yielding about $40-million each. After that they each held 5.9 million shares and have quietly sold down their positions over the past few years. Most recently, Mr. Gluskin unloaded 700,000 shares between 2010 and 2011, lowering his share total to three million voting shares.

Mr. Freedman is the third-largest owner of voting shares, owning 15 per cent of the class.

On top of their share holdings, Mr. Gluskin and Mr. Sheff were both paid handsomely leading up to the financial crisis when their portfolios made hefty returns for investors. In 2005, each man earned $9-million in base salary and other compensation.

By comparison, the current chief executive officer hauled in $2.6-million in 2011, and only $375,000 last year after he and Mr. Webb gave up their bonuses because of a "significantly reduced employee bonus pool," according to the company's 2012 proxy.

While Mr. Gluskin and Mr. Sheff may keep the company under their control for the foreseeable future, they've only got a few years left to play their trump cards. According to regulatory documents, their voting shares automatically convert to regular shares in May 2016.