Soames stands down after 8 years at Serco
RUpERT Soames is stepping down as chief executive of Serco – after earning more than £30m during his eight years at the helm.
The 63-year-old, who is Sir Winston Churchill’s grandson, is credited with turning around the fortunes of the outsourcing giant, which was mired in scandal when he took over in 2014.
But Serco has also attracted criticism more recently over the profits it has earned from running Test and Trace centres during the pandemic.
Soames said it was a ‘privilege’ to lead Serco and quipped: ‘It is now time for me to outsource myself.’
Shares fell 6.8pc, or 12.2p, to 168p after the announcement.
Soames will step down at the end of this year but will stay on as an adviser before retiring from the company in September 2023.
Serco employs 25,000 in the UK and 55,000 globally, operating in the US and Canada, Australia, New Zealand, Hong Kong and the Middle East as well as in mainland Europe. In Britain its work includes transporting prisoners and running six prisons, as well as operating immigration detention centres and London’s cycle-hire scheme.
A scandal over a prisoner tagging contract in 2013 – before Soames joined – saw Serco repay £68.5m to taxpayers. It billed the Government for tagging those who were either dead, in jail or had left the country. Serco later also paid a further £23m in fines and costs following a Serious Fraud Office probe into the episode.
More recently its profits have been boosted by being paid more than £600m for its work on the much- criticised Test and Trace programmes. That earned a rebuke from Labour leader Sir Keir Starmer who said last year that it was ‘outrageous’ that Serco was resuming payouts to shareholders on the back of those earnings.
Soames has been paid a total of £28.1m since taking over as chief executive and could earn as much as £4.2m for this year if he hits performance targets.
He will also continue to receive a proportion of his base salary of £850,000 and annual bonus going into 2023, until he has served 12 months’ notice. Serco chairman John Rishton said Soames ‘should be really proud of what he has achieved’. He added: ‘Serco is unrecognisable from the business that he joined in 2014.
‘Under his leadership, the business was stabilised, a clear strategy developed and executed, which has resulted in the strong and successful business it is today.’
Soames has said he will not be taking up any other executive roles, a spokesman for the company said.
Australian Mark Irwin, the head of Serco’s UK and Europe division, will take over as chief executive.
Analysts at Liberum said some investors would be ‘inevitably disappointed’ by the departure but that Irwin, 57, was a ‘safe pair of hands’.