Ferratum Oyj's (ETR:FRU) CEO Might Not Expect Shareholders To Be So Generous This Year

Ferratum Oyj (ETR:FRU) has not performed well recently and CEO Jorma Jokela will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 20 April 2021. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Ferratum Oyj

Comparing Ferratum Oyj's CEO Compensation With the industry

At the time of writing, our data shows that Ferratum Oyj has a market capitalization of €121m, and reported total annual CEO compensation of €202k for the year to December 2020. That's a slight decrease of 6.5% on the prior year. It is worth noting that the CEO compensation consists entirely of the salary, worth €202k.

In comparison with other companies in the industry with market capitalizations under €168m, the reported median total CEO compensation was €285k. From this we gather that Jorma Jokela is paid around the median for CEOs in the industry. Moreover, Jorma Jokela also holds €35m worth of Ferratum Oyj stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	€202k	€216k	100%
Other	-	-	-
Total Compensation	€202k	€216k	100%

On an industry level, around 82% of total compensation represents salary and 18% is other remuneration. On a company level, Ferratum Oyj prefers to reward its CEO through a salary, opting not to pay Jorma Jokela through non-salary benefits. 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.

Ferratum Oyj's Growth

Over the last three years, Ferratum Oyj has shrunk its earnings per share by 71% per year. It saw its revenue drop 30% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Ferratum Oyj Been A Good Investment?

Few Ferratum Oyj shareholders would feel satisfied with the return of -79% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Ferratum Oyj pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 3 warning signs for Ferratum Oyj that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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. 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.
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