Next chief executive Simon Wolfson paid record £7m last year | Next
Next chief executive Simon Wolfson took home more than £7 million last year; It was the highest ever pay packet and could be handed up to £9.27 million this year after the retailer announced plans to increase basic pay and bonuses.
The listed company said it had increased the pay deal for the long-term leader of the fashion and homewares retailer, which now controls a range of brands in the UK including Gap, Victoria’s Secret, Cath Kidston, Reiss and FatFace, as his pay was 30% below the average for FTSE 100 bosses.
The changes were also made because Next’s return to shareholders has been higher than other leading listed companies for several years, directors on the compensation committee said in the annual report published on Thursday.
“Given this consistently superior performance, the committee does not consider current pay levels to be appropriately aligned with performance,” the report said. It also stated that salaries needed to be increased due to “the need to retain and motivate a high-quality management team, support regular succession planning and the need to recruit externally where necessary”.
Last year Wolfson’s salary rose to £7.4 million from £4.9 million the previous year after he earned £967,000 in basic salary, a maximum annual bonus of £1.45 million and a long-term bonus of £4.7 million during the financial year, as well as benefits such as pension contributions and a company car with a chauffeur.
This year, Wolfson’s annual basic salary rises by 3% to £1 million, but his maximum annual bonus rises from 150% to 200% of salary, and his long-term bonus rises from 225% to 400% of salary. Long-term bonus performance will be evaluated based on earnings per share and dividend growth.
The company said it had abandoned its previous measure of total returns to shareholders compared to 20 other publicly traded retailers, in part because “many retailers have failed over the past two decades and so it has become increasingly difficult to build a basket of suitably comparable businesses.”
Other Next non-executive directors’ long-term bonus potential will rise to 300% of their salaries, and the company said it wanted to “reserve the right” to increase their annual bonuses to 200% of their salaries, up from 150% at present. Four-fifths of Next’s managing directors currently earn more than £3 million, including bonuses.
Despite warnings of potential inflation and declining consumer confidence as a result of the conflict in the Middle East, Next last month raised its profit forecast for the year by £8m to £1.2bn by January 2027, following better-than-expected sales in January this year. Last year it made a profit of £1bn for the first time.
The retailer was founded in 1982 when Hepworths, the men’s suit retailer founded in 1864 by Leeds tailor Joseph Hepworth, acquired women’s clothing chain Kendall & Sons and began reinventing it.
