Next chief executive Lord Wolfson has pledged to raise shopfloor wages at the retailer by at least 5%, offering to share his bonus among staff if there is a shortfall in funding.
The company’s annual report showed Wolfson was paid £4.66m in cash and shares last year, including a £1.1m bonus. This compared with a £4.65m package the year before.
The retailer has axed the executive bonus scheme that produced a total of £6.4m in payouts that Wolfson shared among staff in the last two years.
Next hopes to fund the pay increase for its 20,000 store staff from rising sales and cost cuts. The October pay rise will take the wage rate from £6.70 to £7.04, or £7.58 including bonuses.
In a letter to staff on Tuesday, Wolfson wrote: “However, in the event there is a shortfall in funding, I have agreed with the board that any bonus I might be due in the year ahead will be used to help fill the gap.
“Spread across so many people my future bonus might not amount to a great deal per head, but I hope at least it will convince you of the company’s sincerity.”
The Tory peer recently provoked anger when he declared the living wage campaign irrelevant. He wrote to staff that he was mortified by the way in which some of his comments were misinterpreted. “I certainly did not intend to belittle the difficulties some people have in making ends meet.”
Wolfson also wrote that the retailer increased store entry level hourly rates by at least 6% last year. A combination of increased wage rates and longer contracts meant that the average staff member earned 33% more than two years earlier.
