Increases to SRV Yhtiöt Oyj's (HEL:SRV1V) CEO Compensation Might Cool off for now

Key Insights

• SRV Yhtiöt Oyj's Annual General Meeting to take place on 27th of March
• Salary of €467.6k is part of CEO Saku Sipola's total remuneration
• The total compensation is 45% higher than the average for the industry
• Over the past three years, SRV Yhtiöt Oyj's EPS grew by 90% and over the past three years, the total loss to shareholders 44%

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In the past three years, the share price of SRV Yhtiöt Oyj (HEL:SRV1V) has struggled to grow and now shareholders are sitting on a loss. 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 27th of March. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for SRV Yhtiöt Oyj

How Does Total Compensation For Saku Sipola Compare With Other Companies In The Industry?

At the time of writing, our data shows that SRV Yhtiöt Oyj has a market capitalization of €93m, and reported total annual CEO compensation of €580k for the year to December 2024. We note that's a small decrease of 5.9% on last year. We note that the salary portion, which stands at €467.6k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Finland Construction industry with market capitalizations below €184m, reported a median total CEO compensation of €401k. This suggests that Saku Sipola is paid more than the median for the industry. Moreover, Saku Sipola also holds €1.6m worth of SRV Yhtiöt Oyj stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 54% of total compensation represents salary and 46% is other remuneration. SRV Yhtiöt Oyj pays out 81% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at SRV Yhtiöt Oyj's Growth Numbers

Over the past three years, SRV Yhtiöt Oyj has seen its earnings per share (EPS) grow by 90% per year. In the last year, its revenue is up 22%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has SRV Yhtiöt Oyj Been A Good Investment?

Few SRV Yhtiöt Oyj shareholders would feel satisfied with the return of -44% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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 1 warning sign for SRV Yhtiöt 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.