It Looks Like Tecnotree Oyj's (HEL:TEM1V) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• Tecnotree Oyj's Annual General Meeting to take place on 15th of April
• CEO Padma Ravichander's total compensation includes salary of €630.0k
• The total compensation is 206% higher than the average for the industry
• Tecnotree Oyj's EPS declined by 11% over the past three years while total shareholder loss over the past three years was 49%

The results at Tecnotree Oyj (HEL:TEM1V) have been quite disappointing recently and CEO Padma Ravichander bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 15th of April. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Tecnotree Oyj

Comparing Tecnotree Oyj's CEO Compensation With The Industry

According to our data, Tecnotree Oyj has a market capitalization of €109m, and paid its CEO total annual compensation worth €1.1m over the year to December 2023. That's a notable decrease of 42% on last year. In particular, the salary of €630.0k, makes up a fairly large portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Finnish Software industry with market capitalizations below €184m, we found that the median total CEO compensation was €359k. Hence, we can conclude that Padma Ravichander is remunerated higher than the industry median. Furthermore, Padma Ravichander directly owns €15m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	€630k	€547k	57%
Other	€470k	€1.3m	43%
Total Compensation	€1.1m	€1.9m	100%

On an industry level, around 94% of total compensation represents salary and 6% is other remuneration. Tecnotree Oyj sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Tecnotree Oyj's Growth

Tecnotree Oyj has reduced its earnings per share by 11% a year over the last three years. In the last year, its revenue is up 9.5%.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Tecnotree Oyj Been A Good Investment?

The return of -49% over three years would not have pleased Tecnotree Oyj shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for Tecnotree Oyj you should be aware of, and 1 of them can't be ignored.

Important note: Tecnotree Oyj is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.