TalkTalk chief executive Dido Harding to step down

Dido Harding, the chief executive of TalkTalk, is to stand down 18 months after the company was hit by a cyber-attack affecting tens of thousands of customers.

Harding, who said she wanted to focus on “more activities in public service”, will leave the company in May.

“I’m a really big believer in chief executives not staying forever,” she said. “After seven extraordinary and fulfilling years, during which we have transformed TalkTalk’s customer experience and laid the foundations for long-term growth, I’ve decided it’s time for me to start handing over the reins at TalkTalk and focus more on my activities in public service.”

She said that her decision to leave had nothing to do with the cyber-attack, which she said was “ancient history, [there is] no connection at all”.

The company’s share price is down almost 30% on a year ago but Harding said she did not feel like she was departing a business that was not in good shape.

“It is never ‘job done’ in a challenger telco [company] ever,” she said. “I’ve always been of the view that two-term presidency rule is a pretty good one and CEOs shouldn’t overstay their welcome. It is time to start the process of transitioning. I am enormously proud of how we have transformed the TalkTalk customer experience.”

Harding is a member of the House of Lords, a trustee of digital inclusion charity Doteveryone and a non-executive director of the Bank of England.

She was paid £2.81m in 2015 despite the cyber-attack costing the company £60m and 101,000 customers. Her total remuneration was more than double the £1.05m she had received in 2014, as her £550,000 salary was bolstered by a £1.97m payout under TalkTalk’s long-term incentive plan.

The company cut her cash bonus in half, from £432,000 to £220,000, as a result of the cyber-attack. She donated the bonus to the charity Ambitious about Autism in recognition of the problems caused by the attack.

Harding will work just two months of TalkTalk’s next financial year starting in April, but will be paid her full £550,000 annual salary.

In addition, she will receive a payout of about £350,000 relating to TalkTalk’s long-term incentive plan (LTIP), on the basis of the company’s share price on Wednesday. The actual payout level will be determined when TalkTalk reports its full results for 2016 in May.

Harding also holds a personal shareholding of more than 4.4m shares, just under 2% of TalkTalk, which at Wednesday’s share price was worth almost £7.5m.

Tristia Harrison, currently the managing director of TalkTalk’s consumer operation, will take over from Harding as chief executive. Harrison, who has been on the TalkTalk board since 2014, has worked at the company for seven years.

Charles Dunstone, the non-executive chairman of TalkTalk, will move into the role of executive chairman after he steps down as the chair of Dixons Carphone on 1 May.

Dunstone said that leaving the Carphone Warehouse business he founded 27 years ago showed his commitment to TalkTalk’s future.

“It really is the end of an era. It is very emotional,” he said. “Take that as a reflection of my dedication to TalkTalk and belief in what we can do with it. This is [now] my main focus. I’m excited at the prospect of spending more time on TalkTalk, beginning with delivering another successful performance this year.”

He said he is taking the executive chairman role because the team taking over from Harding, which includes TalkTalk Business chief Charles Bligh stepping up to chief operating officer, needed time to bed in.

“We have a great new team here but they haven’t run a public company before so I really need to step up and help them,” he said. “You could never say I was a non-executive could you, having founded the business. It’s about putting more time and effort into TalkTalk. There is such a role for a challenger brand and it has so much more to do.”

He will remain as a senior adviser to Dixons Carphone, which has appointed Lord Livingston, a former chief executive of BT, as its new chairman.

Dunstone, who created TalkTalk in 2002, said that Harding had been a “tireless, energetic and effective force for good from the day she joined”.

“She has helped transform TalkTalk into a much stronger business,” he said. “She leaves with our thanks and very best wishes for the future.”

In October, TalkTalk was hit with a record £400,000 fine for the security failings that led to the company being hacked in October 2015.

The hack resulted in the attacker accessing the personal information of more than 150,000 customers of the internet service provider, including sensitive financial data for more than 15,000 people.

The previous highest fine ever issued by the Information Commissioner’s Office was £350,000, against Prodial, a spam-calling company responsible for more than 46m automated nuisance calls.

TalkTalk’s results for the third quarter of its financial year, the three months to the end of December, were in line with analyst expectations.

The company lost 42,000 broadband customers and 31,000 TV customers as revenues fell from £459m to £435m year on year for the period.

However, the company said that the launch of fixed low-price plans in October, as well as more service improvements, is starting to pay off with a return to customer growth expected in the first three months of the year and a lowering in the rate of customers leaving to rivals.

TalkTalk’s share price rose by 7% to 167p.