We Think The Compensation For TKM Grupp AS' (TAL:TKM1T) CEO Looks About Right

Key Insights

• TKM Grupp's Annual General Meeting to take place on 17th of March
• Total pay for CEO Raul Puusepp includes €144.0k salary
• The total compensation is 71% less than the average for the industry
• Over the past three years, TKM Grupp's EPS fell by 5.0% and over the past three years, the total shareholder return was 10%

Performance at TKM Grupp AS (TAL:TKM1T) has been rather uninspiring recently and shareholders may be wondering how CEO Raul Puusepp plans to fix this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 17th of March. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

View our latest analysis for TKM Grupp

Comparing TKM Grupp AS' CEO Compensation With The Industry

At the time of writing, our data shows that TKM Grupp AS has a market capitalization of €406m, and reported total annual CEO compensation of €280k for the year to December 2024. Notably, that's a decrease of 16% over the year before. We note that the salary of €144.0k makes up a sizeable portion of the total compensation received by the CEO.

On examining similar-sized companies in the Europe Consumer Retailing industry with market capitalizations between €185m and €739m, we discovered that the median CEO total compensation of that group was €979k. This suggests that Raul Puusepp is paid below the industry median.

Component	2024	2023	Proportion (2024)
Salary	€144k	€138k	52%
Other	€136k	€196k	48%
Total Compensation	€280k	€333k	100%

On an industry level, around 40% of total compensation represents salary and 60% is other remuneration. According to our research, TKM Grupp has allocated a higher percentage of pay to salary in comparison to the wider 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.

A Look at TKM Grupp AS' Growth Numbers

Over the last three years, TKM Grupp AS has shrunk its earnings per share by 5.0% per year. Revenue was pretty flat on last year.

Overall this is not a very positive result for shareholders. And the flat revenue is seriously uninspiring. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has TKM Grupp AS Been A Good Investment?

With a total shareholder return of 10% over three years, TKM Grupp AS shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

Shareholder returns while positive, need to be looked at along with earnings, which have failed to grow and this could mean that the current momentum may not continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for TKM Grupp that you should be aware of before investing.

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.

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.