Capita chief Jon Lewis to step down

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Capita has announced that chief executive Jon Lewis will retire at the end of the year. He will be replaced by Adolfo Hernandez, Amazon Web Services’ vice-president of global telecommunications.

The change in leadership comes after two data breaches at one of the UK’s biggest outsourcing groups.

Capita had warned clients including USS — the UK’s biggest private sector pension plan — that the personal data of members might have been stolen during a cyber attack in March.

More than 500,000 individuals pay in or draw down from pension schemes that rely on Capita’s technology. The pension schemes of Pearson, Marks and Spencer, Diageo, Unilever, BAE and Atlas Master Trust said that their members’ personal data was likely to have been accessed.

Hernandez’s 30-year career in the technology sector has included senior leadership roles at SDL plc and Alcatel-Lucent.

However, some analysts were surprised at the appointment of an executive little known in the outsourcing sector. Stephen Rawlinson, analyst at Applied Value, also noted Hernandez had little “experience of handling UK publicly listed companies”.

Capita said Lewis would step down towards the end of the year, but will remain in the business until July 2024 to ensure an orderly transition.

The company has also been embroiled in a separate data breach in which files containing details on local council benefit payments were left exposed on an unsecured Amazon data bucket. 

Eight local councils said their files were potentially put at risk through unsafe storage and some have been critical of Capita’s response.

Colchester city council said it had written to 7,349 residents and customers that were affected by the incident.

Despite his attempts to restructure Capita and reduce debt while streamlining its sprawling operations, the company’s share price plunged almost 80 per cent during Lewis’s five-year tenure as chief executive.

“Our concern was that while the company was restructuring . . . strategically its position was weakening all the time — its competitors were not standing still whilst it was sorting out its problems,” said Robin Speakman, analyst at Shore Capital.

Capita was “in a much healthier position”, but “if one of the consequences of the restructure has been that eyes have been taken off the ball in respect of cyber security then clearly the management team is culpable for that”, he added.

Chair David Lowden noted that Lewis delayed his retirement from Capita, paying tribute to his commitment. He added that the incoming chief Hernandez had a “great track record in accelerating revenue growth driven by digital services”, and his appointment was “testament to the exciting potential for the business”.