LONDON — The CEO of High Street and catalogue retailer Next saw his total pay package fall by £2.45 million ($US3.14 million) last year after a tough year for the company.
Next’s annual report, released on Tuesday, shows that Lord Wolfson’s total remuneration for 2016/17 was £1.84 million, compared to £4.29 million in 2016/17 — a fall of 55%. Lord Wolfson received a 1% rise in his base salary to £766,000 but missed out on his bonus and saw other performance related pay decline.
Mid-market retailer Next suffered its first fall in profits since the recession in 2016/17, down 3.8% to £790.2 million in the year to January 1. Next’s share price collapsed 14% when it warned at the start of the year that profits were likely to fall.
Lord Wolfson is seen by the City as one of the canniest CEOs in retail and Next typically outperforms the market, but suffered a significant dip last year, as the below chart demonstrates:
Next blamed “inflationary pressures” from things like the National Living Wage, the Apprenticeship Levy, the collapse in the pound last year following the Brexit vote, and the business rates review for poor performance last year.
High Street retailers are also facing increasingly tough competition from online shops and suffering from a wider showdown in British shopping habits.
Next says in its annual report: “It has been a challenging year for NEXT and the remuneration outcomes for the directors have reflected this.
“Total annual remuneration earned by our executive directors for the financial year 2016/17 was significantly less than that earned for the financial year 2015/16. In the view of the Remuneration Committee, this is appropriate and aligns the remuneration received by management with the experience of shareholders.”
Next wider management team also took a pay cut of between 35-40% according to the report.
Management at the retailer may struggle to return the business to its former strength this year. UBS said in a note earlier this month that it is seeing a “dramatic reduction in consumer discretionary income and intention to spend” and expects people to cut down on clothes shopping as a result.
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