(Thursday 15th May) A new poll commissioned by responsible investment NGO ShareAction can reveal that 7 in 10 people surveyed believe it is not acceptable for CEO pay to be over 100 times that of their lowest paid employees. This comes as a resolution on low pay co-filed by investors at retail giant Next will go to a vote today at the company’s annual general meeting (AGM).
Last year, the CEO of Next was paid £4.72 million, which made for a ratio of 219 to 1 when compared with its lowest paid workers and recorded pre-tax profits of just over £1 billion this financial year. Despite this, the company has stated cost implications prevent it from meeting the demands of the resolution, which calls for greater transparency on the extent and effects of low pay on the company.
In addition, the poll conducted by Survation also uncovered that 93% of Next shoppers think it is important for employers to pay their staff the real Living Wage rather than the legal minimum and almost a third of Next customers surveyed said they would stop shopping at the retailer if they knew it did not pay all its staff the real Living Wage.
Currently Next only pays staff who are over 21 the National Living Wage (£12.21), with some regional pay weighting for London, though this does not accurately reflect the difference in the cost of living in the area and is lower than the real Living Wage more broadly.
The polling also showed 88 per cent of people think it is important that employers pay their staff a real Living Wage based on the true cost of living rather than the legal minimum wage.
Louise Eldridge, Head of Good Work at ShareAction said: “Poor wages are a massive problem across our high street, leaving workers vulnerable and struggling to make ends meet, whilst driving up turnover costs and hindering productivity for retailers themselves.
“It’s common sense that enormous wage disparities aren’t good for morale in companies or society more broadly. What’s more, this polling has made it clear people want to know that the places they go to shop are paying staff a decent wage that covers the real cost of living.
“We urge investors to vote in support of our resolution today calling on Next to come clean on the issue of low wages, with greater transparency as a critical first step toward better protecting their staff by paying a real Living Wage, and a fairer and healthier economy in the long run.”
The resolution was filed by 7 institutional investors managing over £1 trillion in assets, including Axa Investment Managers, Scottish Widows, Trust for London, the Greater Manchester Pension Fund and Friends Provident Foundation.
Since the filing of the resolution shareholders including the Church of England Pension Board, the California State Teachers' Retirement System and the California Public Employees' Retirement System have disclosed they will be voting in favour of the resolution.
102 individual investors are also backing the resolution, one of whom will ask a question at the AGM in support of the resolution.
Commenting on the upcoming resolution vote, Rev Dr Andrew Harper, Deputy CEO at Epworth Investment Management, said:
“Next cannot build long-term value on short-term neglect. As investors, we’re calling for fair pay disclosures as a minimum; not only because it’s the right thing to do, but because it’s what consumers and pension savers expect. Polling shows that nearly 9 in 10 people think the real Living Wage matters. If Next won’t listen to its lowest-paid workers, it should at least listen to its customers and shareholders. Pay should reflect dignity, not just discounts.”
Heather Taylor, Director of Finance and Resources at Trust for London, said:
“It's clear from this polling that paying living wage is not just good for business and good for employees but it is also what people expect from the shops they use on the high street and the companies their pensions are invested in. Not paying the living wage embeds inequalities - this is why we are co-filing the Next resolution and supporting the work of ShareAction.”
ENDS
Notes to editors
Full data set from Survation is available on request.
Lowest paid workers refers to workers in the 25th percentile of Next’s workforce.
ShareAction will also facilitate representatives from Labour behind the Label and IndustriALL to ask questions on poor pay and working conditions in Next’s global supply chains.
More information around the resolution can be found here.
Established by the Living Wage Foundation, the real Living Wage is the minimum hourly rate necessary for workers to afford housing, food, and other basic needs. The new real Living Wage rates for 2024/25 are £12.60 per hour in UK (up from £10.90) and £13.85 per hour in London (up from £11.95).
The Living Wage Foundation has reported that almost a quarter of UK retail workers – 818,000 people - are not being paid a real Living Wage. This is worse than other sectors and almost double the national average, despite evidence showing that implementing a real Living Wage has tangible business benefits, from increased productivity to reduced turnover.
The Good Work team at ShareAction harnesses the power of shareholders to tackle income inequality and in-work poverty. Our investor group engages some of the biggest publicly owned companies to ensure everyone has access to decent work. This means a guaranteed Living Wage and a secure contract that ensures workers have enough to meet their everyday needs.
ShareAction is an NGO working to shape a world where the financial system serves our planet and its people. We mobilise global investors to use their influence to drive up labour standards, tackle climate change, protect the natural world, and improve people’s health. We push policymakers to ensure the financial system is working in the best interests of society. We work with people to create a movement for change. Visit shareaction.org or follow us @ShareAction to find out more
