Shareholders Will Probably Hold Off On Increasing Metso Oyj's (HEL:METSO) CEO Compensation For The Time Being

Key Insights

• Metso Oyj will host its Annual General Meeting on 25th of April
• CEO Pekka Vauramo's total compensation includes salary of €900.9k
• The overall pay is 48% above the industry average
• Over the past three years, Metso Oyj's EPS grew by 47% and over the past three years, the total shareholder return was 31%

Performance at Metso Oyj (HEL:METSO) has been reasonably good and CEO Pekka Vauramo has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 25th of April. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Metso Oyj

Comparing Metso Oyj's CEO Compensation With The Industry

At the time of writing, our data shows that Metso Oyj has a market capitalization of €9.4b, and reported total annual CEO compensation of €4.7m for the year to December 2023. That's a notable increase of 8.2% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at €901k.

In comparison with other companies in the Finnish Machinery industry with market capitalizations over €7.5b, the reported median total CEO compensation was €3.2m. Hence, we can conclude that Pekka Vauramo is remunerated higher than the industry median. Furthermore, Pekka Vauramo directly owns €4.1m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	€901k	€862k	19%
Other	€3.8m	€3.5m	81%
Total Compensation	€4.7m	€4.4m	100%

On an industry level, around 71% of total compensation represents salary and 29% is other remuneration. It's interesting to note that Metso Oyj allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Metso Oyj's Growth

Metso Oyj has seen its earnings per share (EPS) increase by 47% a year over the past three years. Its revenue is up 8.5% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Metso Oyj Been A Good Investment?

With a total shareholder return of 31% over three years, Metso Oyj shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Metso Oyj that you should be aware of before investing.

Important note: Metso Oyj 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.