A significant proportion of Next shareholders have voted in favour of proposals for the retailer to provide more transparency over how it sets wages at the firm’s annual general meeting.
The clothing giant saw 26.9% of shareholder votes supporting a resolution that called for more information about how many of its staff are being paid below the “real” Living Wage.
“Real” Living Wage is a voluntary hourly wage rate, independently calculated by the Living Wage Foundation and based on the cost of living, that’s higher than the legally mandated National Living Wage. It’s currently £12.60 per hour across the UK and £13.85 in London.
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The proposal was advanced by ShareAction, which campaigns for responsible investment, and was backed by institutional investors such as Axa Investment Managers, Greater Manchester Pension Fund, Scottish Widows, and Trust for London.
Such resolutions do not tend to typically pass with a majority vote, but anything above 20% is considered a significant vote of support that the company would have to respond to.
ShareAction has a wider campaign designed to put pressure on retailers over low pay at this year’s annual general meetings.
The group has put forward proposals to the boards of Next, M&S and JD Sports as part of efforts to see workers paid a real living wage.
Next responded to the vote by agreeing to publish more details of its salary principles in its next annual report.
Charlie Crossley, investment engagement manager at Friends Provident Foundation, said: “Today’s vote signals investors want retailers to address the transparency gap around wage practices.
“It is now clear Next should provide more meaningful disclosure on their policies for low-paid workers, a crucial step toward ensuring workers can meet the cost of living.
“Sector-wide progress is required, which is why investors are also pursuing similar resolutions this year at other major retailers.”
Catherine Howarth, chief executive at ShareAction, said the vote sent “a tough message to the board of Next and the entire retail sector – clearly, investor concern is rising around the problem of retailers underpaying staff and the effects this is having on their business and workers.
“This is a serious level of support for resolutions of this kind, and Next is now legally obliged to respond to this resolution and clarify how it will act on investors’ concerns. We look forward to engaging the company based on a new level of transparency around low pay, a key step to better protecting all its staff with a real Living Wage.
“Major national and international pension funds and other responsible investors have demonstrated they want to see action to drive up standards around pay across the retail sector. We urge shareholders to continue to support the resolutions co-filed at JD Sports and M&S, which will go to a vote later this summer.”
Next response
In response to the result, Next said the resolution was not supported by the board and defeated by a “very significant margin”. However, the firm said it would expand what it publicly shares.
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“Although the board does not agree with the form of the resolution, it recognises the value of providing more clarity on how wages are determined and managed at Next,” it said. “Accordingly, we welcome the suggestion and will expand our disclosure on wage-setting principles and practices in our next annual report.”
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