The Hut Group, which has just awarded founder Matthew Moulding one of the biggest payouts in UK corporate history, has agreed to fund a private security team to protect the entrepreneur and his family, the executive’s personal service contract shows.
Based in offices next to Manchester airport and with a £1bn extension to its headquarters underway, the Hut Group (THG) is an online beauty and nutrition business that has propelled Moulding to become one of Britain’s wealthiest business people.
The news emerged after Moulding – a major Conservative party donor who created the online retailing company in 2004 and remains both its chairman and chief executive – was handed at least £830m in shares after the company’s stock market value hit targets set at its September flotation. His total share awards could rise further if the company’s value rises from its current £6bn to £7.25bn.
View image in fullscreenThe Hut Group is an online beauty and fitness firm, which makes and supplies nutritional supplements, vitamins, personal care and hygiene products. Photograph: The Hut Group/PA
The entrepreneur’s service contract, which has been seen by the Guardian, states: “Private security cover will be provided to the executive, his spouse and children, in accordance with the company’s executive security policy.”
No further details about the security arrangements were given in the document and a THG spokeswoman did not say why its boss and his family might require the service. Since the company’s listing, the media have frequently used images of Moulding on private yachts and attending lavish-looking pool parties, which had been posted on a personal social media account last year.
Moulding owns 25% of the company, a holding worth around £1.5bn. In an unusual arrangement that has been questioned by corporate governance experts, his separate property firm will receive £19m a year in rent from THG.
The billionaire’s contract goes on to state: “Nothing in this agreement … shall prevent [Moulding’s property company from allowing] competitors of the company or any company in the group to operate from those premises.”
THG has grown into a £1bn revenue business after beginning life as a controversial VAT-free online sales operation for Tesco, Asda, WH Smith, Dixons and Best Buy.
Until 2011, it based certain operations in the Channel Islands to exploit European tax rules exempting imports below £18 from VAT when arriving from outside the EU – a loophole closed by the then chancellor George Osborne in his budget of that year.
At the same time, THG also tried to float on the stock exchange, only for the effort to be aborted after the discovery of a multimillion-pound accounting fraud at the company.
Both Moulding plus co-founder and chief financial officer John Gallemore have pledged to donate their THG salaries to charity, which are worth £750,000 and £450,000 a year, respectively.
Both are also each entitled to a bonus of up to 100% of salary.
An identical security clause also appears in Gallemore’s contract, whose 1% stake in THG is worth around £60m.
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A THG spokeswoman said: “THG has an extensive security programme across its global operations to protect its proprietary [intellectual property] and infrastructure including manufacturing, hosting, distribution centre and offices. THG takes the security of all its employees and assets very seriously and the same extends to the senior management team.
“Pre IPO, the properties were divested from THG into PropCo to reduce the company’s debt. PropCo is an independent landlord operating at arms-length to THG. The banks providing debt against the properties require them to be unencumbered as to who can lease them. These are standard industry terms to protect all lenders.”
Moulding has donated £302,000 to the Conservative party since 2014.
This article was amended on 1 December 2020 to clarify that pictures of Moulding that have been published by media since the IPO were taken from a personal social media account last year.