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Shareholder power more visible than ever before

Grainger, the U.K.'s largest listed residential landlord, yesterday felt the full force of shareholder power when investors were given the opportunity to vote on a £3 million "compromise agreement" proposed for its outgoing chief executive. Of the 290 million votes received from shareholders, 53% were against the payment which prompted further disclosures from the board.

It would appear that a mixture of unpaid bonuses, salary in lieu and potential litigation were the reasons for the "compromise agreement" but many shareholders expressed concern that they could not quite understand how the payment was so large. While the board of Grainger was unable to go into great detail about the arrangement it seems that on this occasion even shareholder concerns will have no impact. The company has confirmed that the remuneration report is "advisory only" and despite shareholder concerns and the shareholder vote the Board of Directors will not be adjusting the payment.

Many shareholders will today be asking themselves why were they asked to vote on the proposed £3 million payment if ultimately their concerns and their votes will be ignored?

Despite the fact that shareholder power in this instance is unlikely to have an impact on the underlying situation it does show the degree of resentment in the marketplace regarding various payments, bonuses and remuneration packages.

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