We Think Shareholders May Want To Consider A Review Of AS Tallinna Sadam's (TAL:TSM1T) CEO Compensation Package
Key Insights
- AS Tallinna Sadam to hold its Annual General Meeting on 24th of April
- CEO Valdo Kalm's total compensation includes salary of €160.0k
- The total compensation is 109% higher than the average for the industry
- Over the past three years, AS Tallinna Sadam's EPS fell by 9.2% and over the past three years, the total loss to shareholders 16%
The results at AS Tallinna Sadam (TAL:TSM1T) have been quite disappointing recently and CEO Valdo Kalm 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 24th of April. 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.
Check out our latest analysis for AS Tallinna Sadam
How Does Total Compensation For Valdo Kalm Compare With Other Companies In The Industry?
At the time of writing, our data shows that AS Tallinna Sadam has a market capitalization of €320m, and reported total annual CEO compensation of €234k for the year to December 2024. We note that's an increase of 8.3% above last year. Notably, the salary which is €160.0k, represents most of the total compensation being paid.
On examining similar-sized companies in the Europe Infrastructure industry with market capitalizations between €176m and €704m, we discovered that the median CEO total compensation of that group was €112k. Accordingly, our analysis reveals that AS Tallinna Sadam pays Valdo Kalm north of the industry median.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | €160k | €157k | 68% |
| Other | €74k | €59k | 32% |
| Total Compensation | €234k | €216k | 100% |
Talking in terms of the industry, salary represented approximately 45% of total compensation out of all the companies we analyzed, while other remuneration made up 55% of the pie. AS Tallinna Sadam pays out 68% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at AS Tallinna Sadam's Growth Numbers
AS Tallinna Sadam has reduced its earnings per share by 9.2% a year over the last three years. In the last year, its revenue is up 2.5%.
The decline in EPS is a bit concerning. 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 AS Tallinna Sadam Been A Good Investment?
Since shareholders would have lost about 16% over three years, some AS Tallinna Sadam investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for AS Tallinna Sadam that investors should look into moving forward.
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.
Valuation is complex, but we're here to simplify it.
Discover if AS Tallinna Sadam might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Access Free AnalysisHave 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.