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Blake Goldring is the Chairman & CEO of AGF Management.Yvonne Berg/The Globe and Mail

AGF Management Ltd. is expected to save more $60-million by slashing its dividend 70 per cent, and a big chunk of that cash harvest will come out of the pockets of the fund manager's founding Goldring family.

AGF's chief executive officer Blake Goldring and chief operating officer Judy Goldring (both of whom are children of Warren Goldring, who co-founded the company 57 years ago) indirectly own a total of about 13 million Class B shares through a family holding company. The two executives also indirectly own an additional 46,000 Class A voting shares.

The stakes earned the Goldrings more than $14-million in dividend income last year. Once AGF's dividend cut takes effect in the next quarter, the Goldring's annual dividend income will shrink to about $4-million.

While many argued that AGF's lush dividend was unsustainable for a fund manager coping with net asset outflows, the decision was undoubtedly a tough one for the children of Warren Goldring, who ensured the company faithfully paid a dividend for 46 years.

In an interview with Streetwise's Jacqueline Nelson Tuesday, Blake Goldring explained the cut was needed to fall in line with its peers' dividend payments.

"It was just, frankly, too high. I can say this as the largest shareholder. It's not something we took lightly, that's for sure."

Judging by trading volumes in recent months, AGF must be thankful that yield investors had a pretty good sense the dividend cut was inevitable. More than 30 million shares have traded hands since September, driving the stock price from a high of nearly $13 in September to less than $10 at Monday's close on the Toronto Stock Exchange.

After the dividend cut was announced this morning, AGF's stock plunged 20 per cent to $8.10 a share at mid-day Tuesday.

Correction: Due to an editing error, a previously published version of this article incorrectly identified the owners of 46,000 Class A voting shares in AGF Management Ltd. The shares are owned indirectly by Blake and Judy Goldring.

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