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Business News

Next's boss rakes in £4.5m – and shares an extra payout of £2.4m with his staff

Lord Wolfson, chief executive of Next, pocketed more than £4.5m last year after a healthy rise in annual profits at the fashion and homewares retailer.

But he has taken the almost unprecedented step for a FTSE 100 boss of sharing with his staff an additional payout of £2.4m, following a sharp rise in the group's share price over the last three years.

Lord Wolfson received £4.63m for Next's last financial year, including a salary of £714,000, an annual bonus of £1.06m and a further payout of £514,000 under a long-term incentive plan.

Next increased its pre-tax profits by 9 per cent to £621.6m over the year to 26 January. That rise was driven by a stunning performance from its 26-year-old Directory catalogue and online business.

However, Lord Wolfson was not the highest paid member on its board, as Christos Angelides, the group product director, pocketed a total package of £5.43m.

That included £1.73m for the retailer's share matching plan, in which it hands directors a share for every one they purchase.

A key reason for the difference in the two directors' pay was Lord Wolfson's decision to waive the £2.4m additional bonus from the same share-matching plan (SMP) and hand it to long-serving employees.

That means all full-time and part-time staff who have worked at Next over the three years of the SMP will receive around 1 per cent of their salary, as a one-off bonus, with their July pay.

In an email to staff, Lord Wolfson said he had "greatly benefited" from the rise in its share price from less than £22 in June 2010 to more than £40. That rise had increased the value of the company by about £3bn.

He said: "The exceptional gain in our share price has meant that this award has now become more valuable than I could possibly have expected."

Next's market capitalisation of £7.01bn makes it more valuable than Marks & Spencer's £6.4bn.