Grainger shareholders vote out ex-chief's deal

Feb 11 2010 by Karen Dent, The Journal

SHAREHOLDERS of property giant Grainger have voted out a multi-million pound payout to its former chief executive Rupert Dickinson after he left the company due to ill-health.

The Newcastle-based company said it was “slightly disappointed” after investors yesterday voted against the company’s remuneration report which contained details of the £2.98m payment to the former chief executive – believed to be six times his salary.

After the vote at the company’s annual general meeting in Newcastle, Grainger director of corporate affairs, Dave Butler, said: “The resolution was defeated. We have noted it, the vote is advisory only. We do take shareholders’ concerns seriously.

“We are slightly disappointed. There were very special circumstances and we are satisfied with what we did.”

The Association of British Insurers issued a ‘red top warning’ ahead of the meeting, predicting there would be concern among shareholders about the payment, which Grainger said had been made on legal advice.

Investors’ group PIRC had called on shareholders to oppose the report prior to the AGM.

A PIRC spokesman said: “Any company that loses the vote on its remuneration report has demonstrably failed to convince shareholders that it is handling pay issues effectively.

“It is an advisory vote but the message from investors needs to be taken seriously. Grainger would be well advised to consult with its leading shareholders over how to move forward.”

Despite their refusal to accept the remuneration report, Mr Butler said the mood of shareholders was “solid and positive” after Grainger published an upbeat interim management statement on the same day as the meeting.

Britain’s biggest landlord said its trading pipeline of residential sales rose by 42% to £83.9m from last year’s £58.9m in the four months to January 31. It sold 321 units worth £54.5m during the period.

Mr Butler said Grainger, which raised £237m in a rights issue before Christmas, was now back on the acquisition trail.

“We are cautious but we looking to acquire again. There are opportunities out there,” he said. “We are looking really to see what will make good long-term investments.”

Although concerned about continuing high unemployment rates and a possible squeeze on public spending, Grainger said the recovery was being bolstered by low interest rates and a shortage of property for sale.

It also pointed to an increase in mortgage lending approvals and figures from the Halifax Index of House Prices, which showed a seventh monthly rise in January. Grainger chief executive, Andrew Cunningham, said: “The housing market has shown encouraging signs of stability. We continue to sell well at prices above the last reported valuation.”