At the annual general meeting of Next, a significant number of shareholders voted for proposals that the retailer provide greater transparency in how it sets salaries.
A resolution asking for more information on how many employees are paid below the “real” Living Wage was supported by 26.9%.
The “Real” Living Wage, which is higher than the National Living Wage, is an hourly voluntary wage rate that has been independently calculated by the Living Wage Foundation based on cost of living. The current rate is PS12.60 an hour in the UK, and PS13.85 per hour in London.
ShareAction – a campaign for responsible investing – put forward the proposal, which was supported by institutional investors including Axa Investment Managers and Scottish Widows.
These resolutions are not usually passed by a majority, but anything over 20% is considered to be a vote of support to which the company must respond.
ShareAction is launching a larger campaign to pressure retailers about low wages at the annual general meeting this year.
As part of its efforts to ensure that workers are paid a living wage, the group has made proposals to Next, M&S and JD Sports boards.
Next has responded to the vote with a promise to publish further details about its salary principles in their next annual report.
Charlie Crossley is the investment engagement manager for Friends Provident Foundation. He said: “Today’s vote signals that investors want retailers address the transparency gap surrounding wage practices.
It is clear that Next needs to provide a more comprehensive disclosure of their policies regarding low-paid employees. This would be a critical step in ensuring workers are able to meet the costs of living.
Investors are also working on similar resolutions at other major retailers this year.
ShareAction’s chief executive, Catherine Howarth, said that the vote was a “tough message” to Next’s board and the entire retail industry. Investors are increasingly concerned about the underpayment of staff by retailers and its effects on both their businesses and workers.
This is a significant level of support and Next must now respond to the resolution and explain how it will address investor concerns. We are looking forward to engaging with the company on a basis of a new transparency regarding low pay. This is a crucial step in better protecting its employees by implementing a Living Wage.
“A number of major national and international pension funds, as well as other responsible investors, have shown that they are interested in seeing action taken to improve the standards for pay in the retail sector. We encourage shareholders to continue supporting the resolutions filed by JD Sports and M&S. These will be put to a vote in the summer.
Next response
Next responded to the results by saying that the resolution had not been supported by the board, and was defeated by “a very significant margin”. The firm has said that it will expand the information it shares publicly.
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The board stated that, “Although it does not agree with its form, it recognizes the importance of providing more transparency on how wages at Next are managed and determined,” We will include more information on our wage-setting practices and principles in our next annual reports.
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