The boss of next has seen his pay packet more than halve after 'challenging' trading led to the retailer's first fall in annual profits for eight years.

Chief executive Lord Wolfson saw his total remuneration drop by 55% to £1.8m for 2016/17, down from £4.3m the year before, as the high street bellwether's lacklustre performance left executives with no annual bonus and a significant cut to their long-term share awards.

In the retailer's annual report, the remuneration committee said it had also cut planned pay rises for the Next board after the firm eked out lower-than-expected profits and earnings per share.

Executive directors Michael Law and Jane Shields were both in line for a 15% annual salary increase to £475,000, but instead were handed a 1% rise to £416,200 for 2016.

The move comes as Next unveiled a new remuneration policy for the three years to 2020, which will face a binding shareholder vote at the firm's annual general meeting (AGM) on May 18 this year.

Caroline Goodall, chairman of the remuneration committee, said: 'As outlined in our strategic report it has been a challenging year for Next and the remuneration outcomes for the directors have reflected this.'

Next posted a 3.8% fall in underlying pre-tax profits to £790.2m for the year to January – the first fall in profits since 2008/09 at the height of the financial crisis.

The retailer confirmed in March that it had hiked prices by 4% on average for the first half of the year and warned prices would remain under pressure in the second half from rising buying costs caused by the Brexit-hit pound.

It comes after BP announced earlier this month that boss Bob Dudley has seen his pay package slashed by 40% for 2016 and his maximum earnings cut by 3.7m US dollars (£3m) over the next three years.