Reading through Cairn Homes’ prospectus in 2015, institutional investors must have cocked an eyebrow at the part about founders shares. Founders shares entitle Cairn Homes’ founders – Alan McIntosh, Michael Stanley and Kevin Stanley – to 20 per cent of the ordinary shareholders’ upside, provided shareholders make 12.5 per cent per year. Founders shares are not common in finance. To be fair, Cairn was upfront with investors, and the investors knew what they were buying. And as it turned out, the founders’ shares paid out handsomely. McIntosh and the Stanley brothers converted their founders shares into €118 million worth of…

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