Here's Why AS Tallinna Vesi's (TAL:TVE1T) CEO May Not Expect A Pay Rise This Year

Key Insights

• AS Tallinna Vesi will host its Annual General Meeting on 30th of May
• Total pay for CEO Aleksandr Timofejev includes €113.0k salary
• The overall pay is 39% below the industry average
• AS Tallinna Vesi's EPS declined by 7.7% over the past three years while total shareholder loss over the past three years was 17%

Performance at AS Tallinna Vesi (TAL:TVE1T) has not been particularly rosy recently and shareholders will likely be holding CEO Aleksandr Timofejev and the board accountable for this. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 30th of May. The data we gathered below shows that CEO compensation looks acceptable for now.

Check out our latest analysis for AS Tallinna Vesi

How Does Total Compensation For Aleksandr Timofejev Compare With Other Companies In The Industry?

According to our data, AS Tallinna Vesi has a market capitalization of €216m, and paid its CEO total annual compensation worth €129k over the year to December 2023. That's a fairly small increase of 3.2% over the previous year. We note that the salary portion, which stands at €113.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Europe Water Utilities industry with market capitalizations ranging between €92m and €369m had a median total CEO compensation of €211k. Accordingly, AS Tallinna Vesi pays its CEO under the industry median.

Component	2023	2022	Proportion (2023)
Salary	€113k	€107k	88%
Other	€16k	€18k	12%
Total Compensation	€129k	€125k	100%

On an industry level, around 45% of total compensation represents salary and 55% is other remuneration. AS Tallinna Vesi is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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 Vesi's Growth Numbers

Over the last three years, AS Tallinna Vesi has shrunk its earnings per share by 7.7% per year. In the last year, its revenue is up 7.7%.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. 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 AS Tallinna Vesi Been A Good Investment?

With a three year total loss of 17% for the shareholders, AS Tallinna Vesi would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for AS Tallinna Vesi you should be aware of, and 1 of them shouldn't be ignored.

Important note: AS Tallinna Vesi is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.