Newcastle-based Grainger attacked over £2.9m pay-off

Feb 9 2010 by Karen Dent, The Journal

BRITAIN’S biggest landlord has defended a multi-million-pound payment to its former chief executive when he stepped down from the company due to health reasons.

Newcastle-based Grainger has came under attack from investor group PIRC and the Association of British Insurers (ABI) over revelations that Rupert Dickinson received almost £3m when he left the company last October.

Grainger published details of the £2.98m payment – believed to be around six times Mr Dickinson’s annual salary – in its annual report.

Now PIRC wants shareholders to oppose the remuneration report when they gather for Grainger’s annual general meeting in Newcastle tomorrow.

The group said: “We are concerned over the one-off payment of £2.8m, which equates to six times his salary, made to departing chief executive Rupert Dickinson as a ‘compromise payment’.

“We recommend shareholders oppose the remuneration report.”

Meanwhile, ABI issued a ‘red top warning’ predicting that there will be strong shareholder concern at the AGM.

The group, which represents major shareholders, also issued a red top warning last year over bonuses paid to directors at Newcastle housebuilder Bellway. An ABI spokesman said it issued the warning about Grainger because it was concerned about the lack of information about how the payment to Mr Dickinson had been determined.

The spokesman said: “We are flagging it up so that shareholders can make a responsible voting decision.”

But Grainger defended Mr Dickinson’s settlement as being in the best interests of the company.

A spokesman said: “The payment to Rupert was made strictly on legal advice and consisted of unpaid salary in lieu of notice and accrued but unpaid bonus for past performance, together with a payment to meet the company’s legal responsibilities arising from the reasons behind Rupert’s departure.”

It is believed that part of the payment is made up of £1m of unpaid bonuses.

Mr Dickinson, who was based in London, had joined Grainger in 1992. He became a director two years later and was appointed chief executive in 2002.

On announcing his retirement last year, the company said its strong performance and growth prior to the recession was largely due to his leadership. It also applauded his key role in restructuring the company to deal with the economic downturn.

Former finance director Andrew Cunningham took over as chief executive. He had been acting chief executive during Mr Dickinson’s absence due to health reasons.