Increases to Consti Oyj's (HEL:CONSTI) CEO Compensation Might Cool off for now

Key Insights

• Consti Oyj to hold its Annual General Meeting on 3rd of April
• CEO Esa Korkeela's total compensation includes salary of €345.6k
• The overall pay is 35% above the industry average
• Consti Oyj's three-year loss to shareholders was 7.4% while its EPS grew by 18% over the past three years

In the past three years, the share price of Consti Oyj (HEL:CONSTI) has struggled to generate growth for its shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 3rd of April. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Consti Oyj

How Does Total Compensation For Esa Korkeela Compare With Other Companies In The Industry?

Our data indicates that Consti Oyj has a market capitalization of €84m, and total annual CEO compensation was reported as €647k for the year to December 2023. We note that's an increase of 42% above last year. In particular, the salary of €345.6k, makes up a fairly large portion of the total compensation being paid to the CEO.

In comparison with other companies in the Finnish Construction industry with market capitalizations under €185m, the reported median total CEO compensation was €479k. This suggests that Esa Korkeela is paid more than the median for the industry. Moreover, Esa Korkeela also holds €5.0m worth of Consti Oyj stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	€346k	€323k	53%
Other	€301k	€132k	47%
Total Compensation	€647k	€455k	100%

Speaking on an industry level, nearly 49% of total compensation represents salary, while the remainder of 51% is other remuneration. Our data reveals that Consti Oyj allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Consti Oyj's Growth Numbers

Consti Oyj has seen its earnings per share (EPS) increase by 18% a year over the past three years. Its revenue is up 5.0% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Consti Oyj Been A Good Investment?

With a three year total loss of 7.4% for the shareholders, Consti Oyj would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to 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. That's why we did some digging and identified 3 warning signs for Consti Oyj that you should be aware of before investing.

Switching gears from Consti 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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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.