Here's Why Shareholders May Want To Be Cautious With Increasing Panostaja Oyj's (HEL:PNA1V) CEO Pay Packet

As many shareholders of Panostaja Oyj (HEL:PNA1V) will be aware, they have not made a gain on their investment in the past three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 07 February 2023 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Panostaja Oyj

Comparing Panostaja Oyj's CEO Compensation With The Industry

Our data indicates that Panostaja Oyj has a market capitalization of €37m, and total annual CEO compensation was reported as €256k for the year to October 2022. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at €222.4k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Finnish Professional Services industry with market capitalizations below €184m, we found that the median total CEO compensation was €260k. This suggests that Panostaja Oyj remunerates its CEO largely in line with the industry average.

Component	2022	2021	Proportion (2022)
Salary	€222k	€210k	87%
Other	€33k	€39k	13%
Total Compensation	€256k	€249k	100%

Talking in terms of the industry, salary represented approximately 58% of total compensation out of all the companies we analyzed, while other remuneration made up 42% of the pie. According to our research, Panostaja Oyj has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Panostaja Oyj's Growth

Panostaja Oyj has seen its earnings per share (EPS) increase by 68% a year over the past three years. Its revenue is up 3.7% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Panostaja Oyj Been A Good Investment?

Given the total shareholder loss of 10% over three years, many shareholders in Panostaja 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...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which is potentially serious) in Panostaja Oyj we think you should know about.

Important note: Panostaja 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.

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.