Here's Why NEXT plc's (LON:NXT) CEO Compensation Is The Least Of Shareholders' Concerns

Key Insights

• NEXT's Annual General Meeting to take place on 16th of May
• Total pay for CEO Simon Wolfson includes UK£908.0k salary
• Total compensation is similar to the industry average
• Over the past three years, NEXT's EPS grew by 44% and over the past three years, the total shareholder return was 28%

Under the guidance of CEO Simon Wolfson, NEXT plc (LON:NXT) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 16th of May. Here is our take on why we think the CEO compensation looks appropriate.

View our latest analysis for NEXT

How Does Total Compensation For Simon Wolfson Compare With Other Companies In The Industry?

Our data indicates that NEXT plc has a market capitalization of UK£11b, and total annual CEO compensation was reported as UK£4.5m for the year to January 2024. Notably, that's an increase of 79% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£908k.

In comparison with other companies in the the United Kingdom Multiline Retail industry with market capitalizations over UK£6.4b, the reported median total CEO compensation was UK£4.3m. This suggests that NEXT remunerates its CEO largely in line with the industry average. Furthermore, Simon Wolfson directly owns UK£128m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	UK£908k	UK£865k	20%
Other	UK£3.6m	UK£1.7m	80%
Total Compensation	UK£4.5m	UK£2.5m	100%

On an industry level, roughly 49% of total compensation represents salary and 51% is other remuneration. In NEXT's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

NEXT plc's Growth

Over the past three years, NEXT plc has seen its earnings per share (EPS) grow by 44% per year. It achieved revenue growth of 9.1% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has NEXT plc Been A Good Investment?

NEXT plc has generated a total shareholder return of 28% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for NEXT that investors should think about before committing capital to this stock.

Switching gears from NEXT, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.