Here's Why We Think Aktia Pankki Oyj's (HEL:AKTIA) CEO Compensation Looks Fair for the time being

CEO Mikko Ayub has done a decent job of delivering relatively good performance at Aktia Pankki Oyj (HEL:AKTIA) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 13 April 2021. We present our case of why we think CEO compensation looks fair.

See our latest analysis for Aktia Pankki Oyj

How Does Total Compensation For Mikko Ayub Compare With Other Companies In The Industry?

At the time of writing, our data shows that Aktia Pankki Oyj has a market capitalization of €690m, and reported total annual CEO compensation of €628k for the year to December 2020. We note that's an increase of 47% above last year. We note that the salary of €328.0k makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between €338m and €1.4b had a median total CEO compensation of €487k. This suggests that Aktia Pankki Oyj remunerates its CEO largely in line with the industry average. Moreover, Mikko Ayub also holds €201k worth of Aktia Pankki Oyj stock directly under their own name.

Component	2020	2019	Proportion (2020)
Salary	€328k	€320k	52%
Other	€300k	€107k	48%
Total Compensation	€628k	€427k	100%

On an industry level, roughly 74% of total compensation represents salary and 26% is other remuneration. In Aktia Pankki Oyj's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Aktia Pankki Oyj's Growth

Aktia Pankki Oyj's earnings per share (EPS) grew 2.2% per year over the last three years. In the last year, its revenue is up 13%.

We would argue that the modest growth in revenue is a notable positive. And, while modest, the EPS growth is noticeable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Aktia Pankki Oyj Been A Good Investment?

Boasting a total shareholder return of 34% over three years, Aktia Pankki Oyj has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Aktia Pankki Oyj (1 shouldn't be ignored!) that you should be aware of before investing here.

Switching gears from Aktia Pankki Oyj, 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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