Wolfson donation equivalent to one-off 1.5 per cent pay rise
For the second year in a row, the chief executive of retail giant Next is to share his cash bonus with thousands of staff.
Simon Wolfson plans to divide his £4m bonus among 20,000 employees who have worked for the company since April 2011, which will translate into a one off payment equivalent to a 1.5 per cent pay rise.
In a letter to the company earlier this week, Wolfson thanked his workforce for everybody’s “hard work” in helping achieve a 65 per cent growth in profits per share over the past three years.
The retailer is set to overtake high street rival Marks and Spencer in the financial market for the first time in 2014, after it announced annual profits of £695m.
"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,” he wrote.
"Together, you have helped ensure that Next emerges from the credit crunch in better shape than it went in."
This is the second year running that Wolfson has shared his bonus. In 2013 he gifted £2.4m to 19,400 of Next’s staff, which he was awarded through a ‘share matching plan’, which has been in place since 2011.
As part of the plan, executives convert part of their annual bonuses into Next stock, which Wolfson said in the letter, explains the increased value of this year’s bonus.
The trebling of the company’s shares means Wolfson’s bonus "has become more valuable than I could possibly have hoped,” he said, going on to say that he was in a “very fortunate position to have significantly benefited as a shareholder”.
Next's chief executive is expected to receive more than his £4.6m salary in 2013, when his annual pay and bonuses are revealed tomorrow (Friday 11th of April).
Company staff will receive their share of the bonus on a pro rata basis, which amounts to an average of around £200. This is ahead of a planned pay rise in June, which will see Next’s minimum pay increase by 37p to £6.70.
A number of other changes are in place at the retailer to “improve the level of service we offer our customers whilst making Next a more rewarding place to work,” Wolfson wrote.
"We have introduced a new bonus scheme, new recruitment processes, more hours available to work on shift market place, and a new appraisal system,” he explained.
But while the changes and pay offer were welcomed, Mick Rix, GMB national officer for retail staff said it still wasn’t enough.
"This pay rise, while welcome, will place Next staff just above national minimum rate of £6.50 from 1 October. This is well below a living wage," he said.