Shareholders push UK retailers on living wage

Shareholder request for enhanced disclosure gets 34% of non-insider votes at JD Sports after securing close to a third at M&S on Tuesday.

UK retailers are facing a new wave of pressure from shareholders to address their pay practices. 

Investors have thrown their weight behind living wage proposals at JD Sports, Marks & Spencer, and Next in recent weeks. 

At JP Sports, more than a third of independent shareholders backed a request for increased disclosures on pay at its annual meeting yesterday (Wednesday). 

The company was asked for more details about the number of its direct employees paid below the real living wage and its approach to third-party contracted staff.  

The same resolution attracted 30.7% support the day before at Marks & Spencer’s annual meeting. 

Nearly 27% endorsed it at Next last month.  

Under the UK’s Corporate Governance Code, the results at Marks & Spencer and Next mean they must now issue a response to investors.  

Both have said they will consult further with shareholders. 

ShareAction, the campaign group that coordinated all the proposals, described the results as “a warning shot” and a sign that many investors wanted to see improved pay conditions for the lowest-paid workers.   

Support for this round of demands has been significantly higher than it was for a similar proposal tabled in 2022 at Sainsbury’s. 

In that request, ShareAction asked for more than just disclosure, calling for the supermarket to secure accreditation from the Living Wage Foundation. 

It received less than 17% support from shareholders at the time, and resulted in one of Sainsbury’s largest shareholders, Schroders, being kicked out of ShareAction’s Good Work Coalition over its misalignment. 

Social and governance expert Tom Powdrill described this year’s tallies as “strong results” and pointed to two possible drivers for the uptick in backing.  

One is the focus on transparency rather than behaviour change, and the other is that inflation levels have driven a cost of living crisis in the UK, which was less visible ahead of the 2022 vote at Sainsbury’s. 

“It’s possible that it would have done better once cost of living pressures became very sharp,” Powdrill told Real Economy Progress.