Here's Why We Think Fondia Oyj's (HEL:FONDIA) CEO Compensation Looks Fair for the time being

Key Insights

• Fondia Oyj will host its Annual General Meeting on 20th of March
• Total pay for CEO Harri Savolainen includes €239.4k salary
• Total compensation is similar to the industry average
• Fondia Oyj's total shareholder return over the past three years was 8.8% while its EPS grew by 19% over the past three years

CEO Harri Savolainen has done a decent job of delivering relatively good performance at Fondia Oyj (HEL:FONDIA) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 20th of March. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

Check out our latest analysis for Fondia Oyj

How Does Total Compensation For Harri Savolainen Compare With Other Companies In The Industry?

According to our data, Fondia Oyj has a market capitalization of €28m, and paid its CEO total annual compensation worth €301k over the year to December 2023. This was the same amount the CEO received in the prior year. Notably, the salary which is €239.4k, represents most of the total compensation being paid.

On comparing similar-sized companies in the Finnish Professional Services industry with market capitalizations below €183m, we found that the median total CEO compensation was €295k. So it looks like Fondia Oyj compensates Harri Savolainen in line with the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	€239k	€239k	80%
Other	€62k	€62k	20%
Total Compensation	€301k	€301k	100%

Speaking on an industry level, nearly 65% of total compensation represents salary, while the remainder of 35% is other remuneration. Fondia Oyj pays out 80% 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.

Fondia Oyj's Growth

Fondia Oyj has seen its earnings per share (EPS) increase by 19% a year over the past three years. In the last year, its revenue is up 6.2%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Fondia Oyj Been A Good Investment?

Fondia Oyj has generated a total shareholder return of 8.8% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Fondia Oyj (2 shouldn't be ignored!) that you should be aware of before investing here.

Important note: Fondia 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.