Here's Why It's Unlikely That Ponsse Oyj's (HEL:PON1V) CEO Will See A Pay Rise This Year

Key Insights

• Ponsse Oyj to hold its Annual General Meeting on 8th of April
• Salary of €542.9k is part of CEO Juho Nummela's total remuneration
• Total compensation is similar to the industry average
• Over the past three years, Ponsse Oyj's EPS fell by 29% and over the past three years, the total loss to shareholders 14%

Shareholders will probably not be too impressed with the underwhelming results at Ponsse Oyj (HEL:PON1V) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 8th of April. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Ponsse Oyj

Comparing Ponsse Oyj's CEO Compensation With The Industry

At the time of writing, our data shows that Ponsse Oyj has a market capitalization of €753m, and reported total annual CEO compensation of €1.2m for the year to December 2024. That's a modest increase of 5.7% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €543k.

On comparing similar companies from the Finnish Machinery industry with market caps ranging from €371m to €1.5b, we found that the median CEO total compensation was €1.1m. From this we gather that Juho Nummela is paid around the median for CEOs in the industry. Moreover, Juho Nummela also holds €4.3m worth of Ponsse Oyj stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 74% of total compensation represents salary, while the remainder of 26% is other remuneration. In Ponsse Oyj's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Ponsse Oyj's Growth Numbers

Over the last three years, Ponsse Oyj has shrunk its earnings per share by 29% per year. In the last year, its revenue is down 8.7%.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Ponsse Oyj Been A Good Investment?

With a three year total loss of 14% for the shareholders, Ponsse Oyj would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too 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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Ponsse Oyj that investors should look into moving forward.

Important note: Ponsse 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.