Next chief executive Lord Wolfson is to share his £4m bonus with the high street retailer’s 20,000 staff, for the second consecutive year.

It’s the second consecutive year the Conservative Peer has shared his bonus with staff, who will pocket about 1.5% of their base salary in May. Hourly rates of retail sales and stock room assistant staff will rise by 37p.

In a letter to staff, Lord Wolfson wrote: “In the last three years, thanks to everybody’s hard work, Next has grown its profits per share by 65% and the company’s shares have trebled. As a result of these exceptional gains, my SMP (Share Matching Plan) bonus has become more valuable than I could possibly have hoped. I am also in the very fortunate position to have significantly benefited as a shareholder. In these circumstances, instead of accepting the award, I have asked the board if they will share it amongst all those who have worked for the company during the three year SMP qualifying period (April 28, 2011 to April 28, 2014).”

He added: “I hope you will accept this bonus as a personal gesture of thanks and appreciation for all your hard work and dedication to Next through testing economic times.

Last year Lord Wolfson waived his £2.4m bonus and gave it away to the retailer’s staff.

The full staff letter from Simon Wolfson

Dear All,


At this time last year, I wrote to let you know that the company would pay a special bonus to qualifying staff. I am very glad to be able to write to you with the same good news this year.


In 2011 the Board awarded me an incentive scheme called a Share Matching Plan (SMP). The value of this bonus was closely linked to the value of the Company’s shares. In the last three years, thanks to everybody’s hard work, Next has grown its profits per share by 65% and the company’s shares have trebled.


As a result of these exceptional gains, my SMP bonus has become more valuable than I could possibly have hoped. I am also in the very fortunate position to have significantly benefited as a shareholder. In these circumstances, instead of accepting the award, I have asked the board if they will share it amongst all those who have worked for the company during the three year SMP qualifying period (April 28, 2011 to April 28, 2014).


The sum in question is just under £4m, and will be shared in proportion to your annual contracted salary. This works out to around 1.5% of your salary. It will be paid as a one off bonus in your May pay. I hope you will accept this bonus as a personal gesture of thanks and appreciation for all your hard work and dedication to Next through testing economic times.


In addition, I am pleased to let you know that we are significantly improving the rate of pay for retail sales consultants and stock room assistants. This year we are going to bring the annual staff pay review forward from October to June. From 1st June your hourly rate will increase by 37p an hour. Your individual rate will shortly be confirmed by letter. Your bonus and all other terms and conditions will remain unchanged. The next pay review will be in October 2015.


Over the last few months I hope you will have seen many positive changes to the way we are managing our stores. We have introduced a new bonus scheme, new recruitment processes, more hours available to work on shift market place, and a new appraisal system. We will also be looking at making better use of people’s time by re-allocating hours from quieter to busier times of day as and when vacancies arise. All these changes have two simple objectives to improve the level of service we offer our customers whilst making Next a more rewarding place to work.


This pay rise should be seen alongside all the other measures we are taking to improve customer service and we hope that, over coming months, you will help to take Next’s service from good to outstanding.


All that remains is for me to thank you for sticking with Next through tough times; for your hard work, common sense, enthusiasm and loyalty to the Company. Together, you have helped ensure that Next emerges from the credit crunch in better shape than it went in - well done and thank you.


Best wishes,
Simon

 

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