Serco chief Rupert Soames receives £4.9m pay package

Rupert Soames, chief executive of Serco, received a £4.9m pay package in 2020, a year in which the outsourcing company attracted controversy over its role in the UK government’s troubled Covid-19 testing programme.

His remuneration — down from £5.2m in 2019 — consisted of a base salary of £850,000, with the remainder made up of bonuses, long-term share incentives and pension, according to the company’s annual report. Angus Cockburn, finance director, received £2.4m, down from £2.8m in 2019. 

Serco is one of five companies running Covid-19 testing sites and also provides call handlers on the NHS’s contact tracing programme, both of which have been heavily criticised. The company said it had received around £400m from Covid-related work worldwide, or around 1 per cent of underlying profits, but that has been stripped out of the bonus calculations.

Last week Serco restored its dividend for the first time in seven years after its full-year underlying trading profit rose by more than a third, to £163m, on revenues that were up by a fifth.

Luke Hildyard, executive director of the High Pay Centre, a think-tank focused on pay, corporate governance and responsible business, said the excessive pay award was “symptomatic of what’s wrong with outsourcing”.

“This is an unfortunate hallmark of the outsourcing of public services. Low-paid workers lose the rights, pay and protections of public sector employees, while executives of the outsourcing firms rake in pay awards that would be unconscionable for a senior public servant,” he said.

Serco has paid a £100 bonus to each of its 50,000 frontline staff, most of whom worked throughout the pandemic providing essential services in prisons, hospitals and transport.

Soames, who has steered the company to a recovery after it teetered on the brink of collapse in 2013, gave up a £900,000 bonus in 2014, when the company had just announced £1.5bn of writedowns and was asking shareholders for £550m in a rights issue. He has never received a pay increase, the company said.

A Serco spokesman said the company is a “global business operating in many markets and geographies with 75 per cent of our profits earned from outside the UK”.

“The remuneration committee adjusted the bonus outcomes to remove all material Covid-related benefits from the performance calculations to ensure that executive directors did not benefit from them,” he added.