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

Key Insights

• Etteplan Oyj to hold its Annual General Meeting on 9th of April
• Total pay for CEO Juha Nakki includes €1.57m salary
• Total compensation is 213% above industry average
• Over the past three years, Etteplan Oyj's EPS fell by 1.2% and over the past three years, the total loss to shareholders 9.5%

The results at Etteplan Oyj (HEL:ETTE) have been quite disappointing recently and CEO Juha Nakki bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 9th 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. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Etteplan Oyj

Comparing Etteplan Oyj's CEO Compensation With The Industry

According to our data, Etteplan Oyj has a market capitalization of €343m, and paid its CEO total annual compensation worth €1.7m over the year to December 2023. We note that's an increase of 92% above last year. We note that the salary portion, which stands at €1.57m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the Finnish Professional Services industry with market caps ranging from €186m to €743m, we found that the median CEO total compensation was €537k. This suggests that Juha Nakki is paid more than the median for the industry. What's more, Juha Nakki holds €1.5m worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	€1.6m	€749k	93%
Other	€112k	€124k	7%
Total Compensation	€1.7m	€873k	100%

Talking in terms of the industry, salary represented approximately 90% of total compensation out of all the companies we analyzed, while other remuneration made up 10% of the pie. Our data reveals that Etteplan Oyj allocates salary more or less in line with the wider market. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Etteplan Oyj's Growth Numbers

Over the last three years, Etteplan Oyj has shrunk its earnings per share by 1.2% per year. In the last year, its revenue is up 2.8%.

A lack of EPS improvement is not good to see. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Etteplan Oyj Been A Good Investment?

Since shareholders would have lost about 9.5% over three years, some Etteplan Oyj investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

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

Shareholders may want to check for free if Etteplan Oyj insiders are buying or selling shares.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.