The Hammers and the potters: same size, but different divisions in the pay league

For Churchill China Plc, business is about selling fine crockery and Harry Potter merchandise. At West Ham United Ltd, the trade is in supplying unbridled joy and, for much of the past nine months, profound misery to thousands of fans on Saturday afternoons.

Yesterday, that was not the only telling difference between the companies. Both last year earned the same amount – about £50m – yet one paid its chairman nearly £500,000 and made a heavy loss while the other made a healthy profit and paid its top employee less than £140,000.

The more profligate of the two, unsurprisingly, was the enterprise currently facing relegation from football's Premier League and with it the likely arrival of administrators at the gates of Upton Park.

Yet, despite a season of disastrous performances, which has left a team boasting five England players and a host of expensive international talent on the brink of a twin financial and footballing disaster, its chairman, Terry Brown, earned £477,000 last year. The club has debts of £63m, including a £25m bill for a new grandstand that boosted the crowd capacity to 35,000 but is a long-term drain on the finances.

Last December, Mr Brown, a chartered accountant, said: "A priority must be to improve our financial results. No business can borrow money to fund losses over anything other than the shortest possible term." The same prudence does not apply to remuneration of the club's top executive.

As well as free access to the director's box at Upton Park, from which he was jeered by angry West Ham fans earlier in the season, Mr Brown's basic salary of £444,000 was topped up with a pension contribution of £33,000. The club, which employs 231 people full time, last year had a record turnover of £48.4m – an increase of 27 per cent on 2001.

Yet, weighed down by a wages bill of £33m, the sixth highest in the league – including £38,000 paid each week to Paolo Di Canio, who has not played since February – they still made a loss of £3.5m.

Compare this with Churchill China, which has been making ceramic tableware in Stoke-on-Trent since 1795, and its current chairman, Stephen Roper. The company, which supplies the restaurant and catering trade as well as securing deals for licensed memorabilia, including Harry Potter and Wallace and Gromit, had a turnover of £50.9m last year.

From this, Churchill China, which has 1,078 employees, made a profit of £2m. For this performance, Mr Roper received a salary package of £139,130 – roughly a quarter that of Mr Brown,

It is a discrepancy that most in more traditional areas of business find deeply puzzling.

Mr Roper, who is paid the average for a business of the size of West Ham or Churchill China, said: "If people are daft enough to pay that money then so be it but I think things will change [at football clubs] in the future."

Certainly they will change at West Ham if they lose against Chelsea today and relegation rivals Bolton and Leeds win, sending the Hammers into the First Division. The club faces an immediate loss of £25m in income from television money and sponsorship deals. It will be forced to sell its best players and could go into administration.

City analysts say a similar performance by a stock-market listed company would lead to an expectation of resignations in the boardroom and no golden goodbyes. Peter Ward, chairman of car accessory company Toad (of similar size to West Ham), said: "If you are successful at entertainment then you expect to pay more to your top people. But if you aren't successful then that should be reflected in the salary. It seems in football that this has been turned a little bit upside down."

Tale of two companies

WEST HAM:

Turnover: £48.4m

Profit/loss: £3.5m loss

No of employees: 231

Highest-paid director: Terry Brown, chairman (£477,000 including pension contributions)

CHURCHILL CHINA:

Turnover: £50.9m

Profit/loss: £2m profit

Number of employees: 1,078

Highest-paid employee: Stephen Roper, chairman (£139,130)