November 28, 2020

Hut Group CEO to get £830m in shares in one of UKs biggest payouts – The Guardian

https://www.theguardian.com/business/2020/nov/15/hut-group-ceo-to-receive-one-of-uk-biggest-payouts-after-share-price-rise

The chief executive of The Hut Group (THG) is to receive one of the biggest payouts in UK corporate history after the recently listed online retailer’s share price rose, sparking calls for higher taxes on the super-rich.

Matthew Moulding, who founded the company in 2004, will receive at least £830m in shares after the share price of the company rose to hit targets set at its flotation on the London Stock Exchange in September. His total share awards could rise further if the company’s market value reaches £7.25bn.

Moulding started THG as a business selling CDs tax-free online, and pivoted to running websites for other retailers such as Asda, Tesco and WH Smith. The company now sells itself as a technology provider helping brands such as Nestlé, Unilever and Danone to sell direct to consumers.

As well as the share awards, Moulding will receive a base salary of £750,000 a year – a large increase from the £318,000 he took as salary in 2019. However, from the initial public offering onwards he has committed to donating salary payment to charity. In total last year, Moulding’s company paid him £4.7m, mostly in share awards.

The huge pay packet could dwarf the £323m that Denise Coates, the owner of the Bet365 gambling website, was paid in 2018.

Luke Hildyard, the director of the High Pay Centre, a campaign group, said: “Payments worth hundreds of millions of pounds are far more than any individual needs or could possibly ever spend, and will strengthen the argument for more effective taxation of corporations and the super-rich.”

Hildyard said THG was guilty of a “litany of corporate governance abuses”, including an arrangement under which Moulding will receive £19m a year in rent from the company on properties he owns.

Hildyard also criticised the company’s remuneration committee. He said: “As is often the case, THG’s remuneration committee is comprised of other serving executives who personally benefit from the prevailing culture of excessive top pay, and have no incentive to think critically about its costs and benefits – to the business or wider society.”

Share awards kick in for Moulding and other senior executives – including the chief financial officer, John Gallemore, and the commercial director, Steven Whitehead – when the market value of the company’s shares breaches certain levels. As long as the market value remains above those “milestone” levels for more than 15 days, the payouts are triggered.

Almost all of the milestones have been achieved, as first reported by the Daily Mail, although the executives are only eligible for the full bonus if the company’s value reaches £7.25bn before 31 December 2022.

A spokesman for THG said: “We are delighted with the market reaction to our IPO and that all of our shareholders are benefiting from the strong performance of the business. The equity scheme was put in place when THG was a private company, and we are delighted that over 200 THG staff have already shared in the scheme, worth around £200m today.”