Cannot modify privileges on Vector.VECTOR.parcels An error has occured: Automation error

Error Message

When granting privileges on a feature class to a user in ArcCatalog, the following 'Automation' error is returned:

"Cannot modify privileges on Vector.VECTOR.parcels
An error has occured: Automation error".

Cause

Granting privileges to a Windows Authenticated user and not specifying the domain generates the above error.

Solution or Workaround