Shareholders revolt over Next pay plans

Nearly one in six shareholders of Next voted against the fashion retailer's remuneration report yesterday, following the decision to change the pay scheme for four top executives midway through its last financial year.

Eighteen per cent of the votes cast were against of the decision in May 2008 that meant the four executives, including the chief executive, Simon Wolfson, would share an additional £351,000 for the financial year ended January 2009, with 82 per cent of votes cast in favour. But 8.5 per cent of shareholders withheld their vote, meaning that nearly 25 per cent of shareholders did not back the remuneration report.

The vote at the annual meeting followed a red-top report from the Association of British Insurers, which said Next's action was a "severe breach of corporate governance best practice".

Next said it changed the targets for all head office staff, including the four board members, in light of the deterioration of the economy. At the start of its 2008-9 financial year, Next said directors could receive a bonus if pre-tax earnings reached 215p a share. In the end, earnings surpassed this, at 221.2p a share. John Barton, Next's chairman, said splitting the bonus four ways was "entirely appropriate" and that most shareholders agreed. Next delivered profits of £429m in 2008-9.