Here's Why Shareholders Should Examine Tulikivi Corporation's (HEL:TULAV) CEO Compensation Package More Closely

Key Insights

• Tulikivi to hold its Annual General Meeting on 24th of April
• Salary of €216.0k is part of CEO Heikki Vauhkonen's total remuneration
• The overall pay is comparable to the industry average
• Over the past three years, Tulikivi's EPS fell by 11% and over the past three years, the total loss to shareholders 0.6%

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

The results at Tulikivi Corporation (HEL:TULAV) have been quite disappointing recently and CEO Heikki Vauhkonen bears some responsibility for this. At the upcoming AGM on 24th of April, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Tulikivi

How Does Total Compensation For Heikki Vauhkonen Compare With Other Companies In The Industry?

According to our data, Tulikivi Corporation has a market capitalization of €29m, and paid its CEO total annual compensation worth €290k over the year to December 2024. That's a modest increase of 6.4% on the prior year. Notably, the salary which is €216.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the Finland Building industry with market capitalizations below €176m, we found that the median total CEO compensation was €303k. From this we gather that Heikki Vauhkonen is paid around the median for CEOs in the industry. What's more, Heikki Vauhkonen holds €5.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 47% of total compensation represents salary, while the remainder of 53% is other remuneration. It's interesting to note that Tulikivi pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Tulikivi Corporation's Growth

Over the last three years, Tulikivi Corporation has shrunk its earnings per share by 11% per year. In the last year, its revenue is down 26%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-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 Tulikivi Corporation Been A Good Investment?

With a three year total loss of 0.6% for the shareholders, Tulikivi Corporation would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Tulikivi that investors should think about before committing capital to this stock.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.