Is Metsä Board Oyj’s (HEL:METSB) CEO Being Overpaid?

In 2014 Mika Joukio was appointed CEO of Metsä Board Oyj (HEL:METSB). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Metsä Board Oyj

How Does Mika Joukio’s Compensation Compare With Similar Sized Companies?

Our data indicates that Metsä Board Oyj is worth €2.1b, and total annual CEO compensation was reported as €1.8m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at €510k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from €907m to €2.9b, and the median CEO total compensation was €1.3m.

As you can see, Mika Joukio is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Metsä Board Oyj is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Metsä Board Oyj has changed over time.

HLSE:METSB CEO Compensation, January 27th 2020
HLSE:METSB CEO Compensation, January 27th 2020

Is Metsä Board Oyj Growing?

On average over the last three years, Metsä Board Oyj has grown earnings per share (EPS) by 28% each year (using a line of best fit). It saw its revenue drop 1.3% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. You might want to check this free visual report on analyst forecasts for future earnings.

Has Metsä Board Oyj Been A Good Investment?

Given the total loss of 1.6% over three years, many shareholders in Metsä Board Oyj are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We examined the amount Metsä Board Oyj pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Metsä Board Oyj (free visualization of insider trades).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.