Around 86,700 employees at John Lewis and Waitrose will receive a bonus worth 6% of their salary.
The bonus is equivalent to more than three weeks’ pay for staff that have been employed by the John Lewis Partnership for an entire year. In total, the bonus will amount to £89.4 million.
The bonus has been awarded after the organisation announced profit before tax and bonuses of £370.4 million in the year ending 28 January 2017.
As an employee-owned business, all 86,700 employees are partners in the organisation.
This year’s partnership bonus is lower than the 2015-16 award, which saw staff receive a bonus worth 10% of salary, totalling £145 million.
John Lewis Partnership awarded a bonus of 11% of salary in 2015, and 15% in 2014.
Average pay increased by 5% for non-management staff in 2016. The average hourly rate of pay for non-management employees is £8.67 an hour, and this is set to increase after the organisation’s April 2017 pay review.
The organisation’s accounting pension deficit has been estimated at £1 billion at January 2017, compared to £940 million in January 2016.
The defined benefit (DB) pension scheme had an actuarial deficit of £479 million at 31 March 2016, which is a decrease from the £840 million recorded in the organisation’s previous valuation in March 2013.
The ongoing contribution rate for the DB scheme will be 10.4% of members’ gross taxable pay, down from 16.4%.
The John Lewis Partnership has established a plan to eliminate the pension deficit over the next 10 years, which includes £303 million in cash contributions, of which £208 million has been paid to date, with the remainder to be paid by 31 March 2026.
Sir Charlie Mayfield, chairman at John Lewis Partnership, said: “In January, we said partnership bonus was likely to be significantly lower this year. The board has awarded a bonus of 6%, which is equivalent to more than three weeks’ pay. [The] bonus is lower because the board has decided to retain more of our annual profits in order to strengthen our balance sheet. This allows us to maintain our level of investment in the face of what we expect to be an increasingly uncertain market this year, while absorbing the costs associated with adapting the Partnership for the future.
“We have continued to put more money into pay. During the year, the average pay rates for our non-management partners rose 5%.”