GRANADA chairman Gerry Robinson was unbowed in the face of shareholder criticism at yesterday's annual meeting over the special benefits package worth #374,000 to five directors.

In a bravura performance before hundreds in London, Mr Robinson said the payment was a ''reasonable settlement'' and that he believed the group should be applauded for its honesty over the matter.

Granada directors have been attacked by institutional and private investors for paying the sum to compensate Mr Robinson and other directors for a reduction from three years to two years in their notice periods in the event of a takeover.

Mr Robinson attacked the ''narrow'' view of corporate governance, and insisted that a strong financial performance was also part of corporate governance.

''What you should ask,'' he told shareholders, ''is whether the business is strong. Do we deliver? Are we successful as a result of the people we have elected as directors?''

While institutions have made their views known, few of their representatives spoke. Anne

Simpson, of corporate governance body the Pensions Industry Research Committee, pointed out that only one other major company had paid compensation for a reduction in service contracts from three to two years. The Greenbury Committee recommended one-year rolling contracts.

Mr Robinson argued that

companies may have hidden

compensation in salary increases or special bonuses, whereas Granada had handled the issue in an up-front way.

Mr Robinson was also asked if he would be taking a pay cut on his appointment as chairman of the Arts Council, which will involve one day's work a week. He said he was sure the remuneration committee would take this into account when next assessing his pay. He added that he did not believe a company's success was related to the hours worked by its leaders.

Turning to other matters, Mr Robinson said Granada was approaching overseas investment cautiously, as the board was aware that a lot of mistakes had been made by companies expanding overseas. He thought emerging economies created a big opportunity to make money but also an ''enormous'' opportunity to lose it.

The Granada chairman told shareholders that the ''pattern of improvement'' in the group seen in 1996-97 had continued into the first quarter of the current year.

''Media and hospitality have both increased their operating profits on last year, with particularly good performances in a number of areas.''

Advertising revenue increased and will improve more strongly through 1998 as benefits of the combined macro region of Granada, Yorkshire, Tyne Tees and Border come through. Yorkshire's profits improved by 15% to #16m in the group's first quarter.

Catering was strongly ahead, with Little Chef and Burger King transactions 66% and 17% up respectively. Turnover and profits of food services advanced 20%.

Travelodge sales were a third higher and hotels, particularly Meridien and those in London, improved their performance.