Gluskin Sheff + Associates Inc. shareholders didn’t like to hear that co-founders Ira Gluskin and Gerald Sheff want $185 million in post-retirement payments. So that they drove the stock lower carrying out a dispute was made public on Thursday.
Retirement agreements supply you with the founders with fixed annual payments of $250,000, along with other benefits and entitlements which go on through out their lives.
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Where it gets tricky could be the “additional remedy” which can be paid if either founder believes Gluskin Sheff is at breach from the obligations. Having a payment similar to 90 % within the fair selling price in the obligations.
Gluskin Sheff considers time being $12.2 million, or 39 cents per share, which has been reflected in the financials since 2009.
Yet the founders are convinced that figure is $185 million, or $5.91 per share.
As Scotiabank analyst Phil Hardie stated, no detailed evidence supporting these claims remains disclosed within the arbitration process.
“Out of your perspective, the claims appear excessive and from line using the initial agreement,” he explained within the research note.
However, since additional information may emerge in Phase II in the arbitration process, that will determine any amounts payable, Hardie expects the uncertainty will weigh on Gluskin Sheff prior to the issue is resolved.
