It's Unlikely That eQ Oyj's (HEL:EQV1V) CEO Will See A Huge Pay Rise This Year

Key Insights

• eQ Oyj to hold its Annual General Meeting on 21st of March
• CEO Mikko Koskimies' total compensation includes salary of €1.76m
• The total compensation is 46% higher than the average for the industry
• Over the past three years, eQ Oyj's EPS grew by 6.4% and over the past three years, the total loss to shareholders 18%

Shareholders of eQ Oyj (HEL:EQV1V) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 21st of March. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for eQ Oyj

How Does Total Compensation For Mikko Koskimies Compare With Other Companies In The Industry?

According to our data, eQ Oyj has a market capitalization of €573m, and paid its CEO total annual compensation worth €2.0m over the year to December 2023. We note that's a decrease of 9.7% compared to last year. In particular, the salary of €1.76m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Finnish Capital Markets industry with market capitalizations ranging between €367m and €1.5b had a median total CEO compensation of €1.4m. This suggests that Mikko Koskimies is paid more than the median for the industry. What's more, Mikko Koskimies holds €1.1m worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	€1.8m	€1.9m	86%
Other	€291k	€322k	14%
Total Compensation	€2.0m	€2.3m	100%

On an industry level, around 55% of total compensation represents salary and 45% is other remuneration. It's interesting to note that eQ Oyj 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.

eQ Oyj's Growth

eQ Oyj's earnings per share (EPS) grew 6.4% per year over the last three years. Its revenue is down 8.7% over the previous year.

We generally like to see a little revenue growth, but the modest EPS growth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 eQ Oyj Been A Good Investment?

With a three year total loss of 18% for the shareholders, eQ Oyj would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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 eQ Oyj that you should be aware of before investing.

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.

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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.