AS Tallink Grupp's (TAL:TAL1T) CEO Compensation Looks Acceptable To Us And Here's Why

Key Insights

• AS Tallink Grupp to hold its Annual General Meeting on 7th of May
• CEO Paavo Nogene's total compensation includes salary of €339.0k
• The overall pay is 60% below the industry average
• AS Tallink Grupp's three-year loss to shareholders was 0.3% while its EPS grew by 116% over the past three years

Shareholders may be wondering what CEO Paavo Nogene plans to do to improve the less than great performance at AS Tallink Grupp (TAL:TAL1T) recently. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 7th of May. 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 AS Tallink Grupp

Comparing AS Tallink Grupp's CEO Compensation With The Industry

At the time of writing, our data shows that AS Tallink Grupp has a market capitalization of €536m, and reported total annual CEO compensation of €344k for the year to December 2023. We note that's a decrease of 9.0% compared to last year. In particular, the salary of €339.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the Europe Shipping industry with market caps ranging from €186m to €746m, we found that the median CEO total compensation was €858k. In other words, AS Tallink Grupp pays its CEO lower than the industry median. Moreover, Paavo Nogene also holds €376k worth of AS Tallink Grupp stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	€339k	€294k	99%
Other	€5.0k	€84k	1%
Total Compensation	€344k	€378k	100%

Speaking on an industry level, nearly 37% of total compensation represents salary, while the remainder of 63% is other remuneration. AS Tallink Grupp pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at AS Tallink Grupp's Growth Numbers

AS Tallink Grupp has seen its earnings per share (EPS) increase by 116% a year over the past three years. In the last year, its revenue is down 1.4%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 AS Tallink Grupp Been A Good Investment?

Given the total shareholder loss of 0.3% over three years, many shareholders in AS Tallink Grupp are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

AS Tallink Grupp pays its CEO a majority of compensation through a salary. The lacklustre share price returns is rather divergent to the robust growth in EPS, suggesting that there may be other factors weighing on it apart from fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for AS Tallink Grupp that investors should be aware of in a dynamic business environment.

Switching gears from AS Tallink Grupp, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.