NEXT faces investor scrutiny over wage transparency

NEXT is under mounting pressure from its investors to disclose how many of its 40,000 employees are paid below the real living wage, ahead of its annual general meeting in Leicester this week.

A coalition of heavyweight shareholders - including AXA, Scottish Widows, and the Greater Manchester Pension Fund - is backing a resolution urging greater transparency on the retailer’s pay practices, according to This is Money. The investors, who collectively manage over £1 trillion in assets, are supporting the motion tabled by responsible investment charity ShareAction.

The resolution seeks clarity on how many employees earn less than the voluntary real living wage, currently set at £12.60 per hour nationally and £13.85 in London. The rate, calculated independently by the Living Wage Foundation, is designed to reflect the true cost of living in the UK and sits above the statutory minimum wage of £12.21 introduced last month.

More than 15,000 UK employers have already committed to paying the real living wage, including half of the FTSE 100. But NEXT, which is forecast to deliver over £1 billion in profits this year, has pushed back against the proposal, citing the "significant cost implications" of aligning pay with the benchmark.

ShareAction CEO Catherine Howarth argued that "the financial rewards of NEXT’s striking commercial success haven’t been shared with its workforce". Clare Richards from the Church of England Pensions Board, another backer of the resolution, said increased pay disclosure would reflect the company’s responsibility to all stakeholders, including its lowest-paid employees.

The retail and wholesale sector remains one of the UK’s largest employers of low-paid workers, with nearly a quarter of its 3.5 million-strong workforce earning less than the real living wage. While minimum wage increases in April lifted wages for millions, including a record 16% rise for workers aged 18 to 20, campaigners say many workers still fall short of earning a sustainable income.

ShareAction is also targeting M&S and JD Sports with similar resolutions at their upcoming annual general meetings in July.

NEXT defended its current approach. It said that wage-setting must strike a fine balance between the interests of investors (who are ultimately savers and pension funds), consumers and employees (many of whom are also savers and investors). The retailer also emphasised its desire to retain "flexibility" rather than adopt a third-party standard for setting pay.

In March, NEXT revealed an annual profit haul of more than £1 billion and hiked its outlook for the year ahead. The high street retail giant, which has 457 stores across the UK, reported pre-tax profits of £1.01 billion for the year to January, up 10.1% on a year earlier.

The following month, the retailer disclosed it paid its CEO, Lord Simon Wolfson, £4.72 million for the year to January 2025 after hitting the £1 billion profit mark for the first time. Lord Wolfson's pay was made up of an annual wage of £1.16 million as well as £3.56 million in bonuses. The retailer's annual report stated. This was up by almost £900,000 compared to the year prior.