Why We Think Reka Industrial Oyj's (HEL:REKA) CEO Compensation Is Not Excessive At All

Key Insights

• Reka Industrial Oyj to hold its Annual General Meeting on 17th of April
• Total pay for CEO Sari Tulander includes €221.0k salary
• Total compensation is 40% below industry average
• Over the past three years, Reka Industrial Oyj's EPS fell by 5.9% and over the past three years, the total shareholder return was 64%

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Shareholders may be wondering what CEO Sari Tulander plans to do to improve the less than great performance at Reka Industrial Oyj (HEL:REKA) 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 17th of April. 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. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

View our latest analysis for Reka Industrial Oyj

How Does Total Compensation For Sari Tulander Compare With Other Companies In The Industry?

At the time of writing, our data shows that Reka Industrial Oyj has a market capitalization of €25m, and reported total annual CEO compensation of €221k for the year to December 2024. Notably, that's an increase of 17% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth €221k.

For comparison, other companies in the Finland Auto Components industry with market capitalizations below €179m, reported a median total CEO compensation of €367k. In other words, Reka Industrial Oyj pays its CEO lower than the industry median.

Talking in terms of the industry, salary represented approximately 53% of total compensation out of all the companies we analyzed, while other remuneration made up 47% of the pie. Speaking on a company level, Reka Industrial Oyj prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Reka Industrial Oyj's Growth Numbers

Over the last three years, Reka Industrial Oyj has shrunk its earnings per share by 5.9% per year. Its revenue is down 11% over the previous year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Reka Industrial Oyj Been A Good Investment?

We think that the total shareholder return of 64%, over three years, would leave most Reka Industrial Oyj shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Reka Industrial Oyj rewards its CEO solely through a salary, ignoring non-salary benefits completely. While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us wonder if these strong returns can continue. Shareholders might want to question the board about these concerns, and revisit their investment thesis for the company.

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 3 warning signs for Reka Industrial 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. 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.