Hut Group founder is no Elon Musk despite the market hype 

Matt Moulding’s huge payout is the only thing that links him to the pioneering entrepreneur behind Tesla electric vehicles

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Not bad for a shirtless pot-washer from Burnley. Less than two months after listing his loss-making conglomerate on the London Stock Exchange, Matt Moulding, the founder of the Hut Group, has scooped a staggering £840m bonus jackpot.

Good on him, you might say. It’s not quite the rags-to-riches tale that people love but Moulding is a working-class northerner whose first job was washing dishes in his local pub, and he’s created an exciting technology company from scratch, so doesn’t he deserve all the success that’s coming to him?

Well, yes and no. There’s reward that is earned and then there’s the sort that is excessive and too easily obtained because of a complete absence of other performance measures.

The Hut Group is not easily explained. Its cheerleaders would have you believe it is Britain’s most exciting technology prospect, perhaps even the next Amazon. The company refers to itself as a “vertically integrated digital-first consumer brands group”, whatever that means.

The City has certainly swallowed the sales pitch. The shares have jumped by more than a quarter from September’s 500p float price to 647p, triggering Moulding’s extraordinary pay day in the process. No wonder he can’t keep his shirt on.

The reality is that the company is a mishmash of different brands, many of them beauty and fitness websites, plus an e-commerce platform tacked on, which runs the online operations of big multinationals.

Is it the entrepreneur’s fault that investors are gullible? No. Nor can he be blamed if the company got its timing spot on and has ridden a stock market recovery fuelled by central bank and government stimulus.

But where bonuses of that sort can be achieved within weeks of a company going public and many of those who bought the shares wouldn’t know an e-commerce business from a widget-maker, it should not be a surprise if the interests of those at the top are not entirely aligned with those of shareholders.

And if, as with the Hut Group, you have a founder who is also chief executive, chairman and landlord, investors should be alert to misaligned incentives. The same with allowing private equity financier Dominic Murphy to be head of the remuneration committee.

Murphy led the London office of KKR, when it became a major shareholder in Hut six years ago. He also has a personal stake worth £116m. It’s a bit like putting Oliver Reed in charge of the drinks cabinet.

Entrepreneurs like Moulding work hard, and there are plenty that never have much to show for it despite all the blood, sweat and tears.

Therefore, when success comes, they believe they deserve every ounce of it. But sometimes all you need is to catch a following wind. However, by the time you have a company worth something, it is human nature to discount the lucky breaks and assume that the edifice is built on the foundations of your own genius.

There will be comparisons with someone like Elon Musk, another entrepreneur who has been handsomely rewarded. This year, he has unlocked $9bn (£7bn) worth of stock options as Tesla’s share price has entered another stratosphere.

But this is someone transforming an entire industry, one previously thought to be untransformable, and with great benefit to the planet, all while sending rockets to Mars on the side.

Are Moulding’s achievements comparable to Musk’s? Of course not. It’s not as if the Hut boss has just split the atom, or invented perpetual motion, or even discovered a Covid vaccine. He sells lippy and muscle protein shakes. Some perspective, please.

A timely shot in the arm

Last week “a great day for humanity”, this week “a vaccine that can stop Covid”. They’re certainly not afraid of bold statements in the pharmaceuticals industry but then it’s probably not a stretch to say that mass Covid immunisation would change the course of history.

Although markets weren’t quite so electrified this time around, the London stock market still recorded its highest close since early June, and in some ways the test results from American biotech Moderna are even more exciting than those published by Pfizer and BioNTech.

For a start, an efficacy rate of 94.5pc from Moderna’s jab is better than the 90pc level reported by its rival. But perhaps more crucially, it has a longer shelf life at refrigerated temperatures, which has massive implications for production, transportation and storage, making rollouts easier.

With a third vaccine, from AstraZeneca and Oxford University, said to be close, widespread inoculation now feels within reach, and therefore the promise of a global economic recovery sooner than expected. Markets remain jittery but a sustained rally now seems more probable than at any time since Covid struck.

G4S risks gilding the lily

Another day, another defence manoeuvre from G4S, this time as it bigs up the part of the business that handles cash for supermarkets and high street chains. But with GardaWorld having secured backing for its bid from less than 1pc of shareholders, it has little to fear.

Has the board got too much time on its hands or is it just investment bankers desperately trying to justify their fees?