Lassila & Tikanoja Oyj's (HEL:LAT1V) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Lassila & Tikanoja Oyj's Annual General Meeting to take place on 27th of March
• CEO Eero Hautaniemi's total compensation includes salary of €456.0k
• The total compensation is similar to the average for the industry
• Lassila & Tikanoja Oyj's EPS declined by 21% over the past three years while total shareholder loss over the past three years was 9.8%

Lassila & Tikanoja Oyj (HEL:LAT1V) has not performed well recently and CEO Eero Hautaniemi will probably need to up their game. At the upcoming AGM on 27th of March, shareholders can hear from the board including their plans for turning around performance. 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.

See our latest analysis for Lassila & Tikanoja Oyj

How Does Total Compensation For Eero Hautaniemi Compare With Other Companies In The Industry?

At the time of writing, our data shows that Lassila & Tikanoja Oyj has a market capitalization of €344m, and reported total annual CEO compensation of €709k for the year to December 2024. We note that's an increase of 29% above last year. We note that the salary portion, which stands at €456.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Finnish Commercial Services industry with market capitalizations ranging between €184m and €734m had a median total CEO compensation of €640k. This suggests that Lassila & Tikanoja Oyj remunerates its CEO largely in line with the industry average.

On an industry level, around 54% of total compensation represents salary and 46% is other remuneration. Lassila & Tikanoja Oyj pays out 64% 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.

Lassila & Tikanoja Oyj's Growth

Over the last three years, Lassila & Tikanoja Oyj has shrunk its earnings per share by 21% per year. It saw its revenue drop 3.9% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Lassila & Tikanoja Oyj Been A Good Investment?

Given the total shareholder loss of 9.8% over three years, many shareholders in Lassila & Tikanoja Oyj are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. 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 CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Lassila & Tikanoja Oyj that you should be aware of before investing.

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.