Simmons & Simmons has completed an executive share incentive scheme for Next, demonstrating that the firm still has a solid relationship with the retailer despite the fact that Herbert Smith muscled in on Next’s corporate work last year.
Herbert Smith won its first job for the FTSE 100 company in October 2002 (The Lawyer, 14 October). A team led by corporate partner Anthony Macaulay advised Next on a share buyback programme after a referral from the retailer’s investment bank Lazard.
However, Simmons still has good connections at the retailer, which instructed it on a groundbreaking executive incentive deal that links senior employee remuneration to the market price of Next shares in four year’s time.
Next relationship partner and corporate lawyer Chris Wilkinson led on the deal, supported by tax partner Nick Cronkshaw.
Wilkinson said: “Next has been a client of Simmons & Simmons for a number of years now and we look forward to working with them on other important matters in the future.”
Next has also historically used Eversheds.
The incentive scheme will see Next executive directors and other key employees invest a total of £1.5m with an unnamed independent third party. The company has added special bonuses, worth a further £1.96m before tax, to the scheme.
In essence, the plan is a gamble that Next’s share price will rise over four years, because the employees’ payout is incrementally linked to share performance.
Wilkinson said: “I would be surprised if no other major listed company did not now seek to follow Next’s example.”