John Lewis lauded for caring capitalism

March 21, 2014 Leave a comment

March 17, 2014 7:03 pm

John Lewis lauded for caring capitalism

By Andrea Felsted, Senior Retail Correspondent

When it comes to the mutual model, one of the most successful examples is in retail.

The John Lewis Partnership, which owns John Lewis department stores and Waitrose supermarkets, has been lauded as both a successful retailer and a model for caring capitalism.

The John Lewis Partnership is owned by its more than 90,000 staff – or partners as they are known. Each year they receive an annual bonus, paid as a percentage of salary. This is decided by the board, based on the surplus after investment is subtracted from the final profit for the year.

While the partnership has been praised, it is not without its own issues. Over the past couple of years it has also been forced to take difficult decisions, for example cutting some management jobs at John Lewis and moving from a final salary scheme to a hybrid between a defined benefit and defined contribution scheme. This year’s bonus was also 15 per cent, compared with 17 per cent last time, while the partnership took a £47.3m charge for compensating staff who had been underpaid for holidays.

Sir Charlie Mayfield, chairman of the partnership, defended the checks and balances contained in the partnership, especially in light of issues at the Co-operative Group. He said: “Our governance structure is very, very different to that of the Co-op. We are owned by our partners. We have partner representatives on our board, also [we have] non-executive directors on our board. I am very confident that our governance is in good shape and prudent shape and we are not taking undue risk of any further exposures”.

 

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