Modulight Oyj's (HEL:MODU) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Modulight Oyj to hold its Annual General Meeting on 1st of May
• CEO Seppo Orsila's total compensation includes salary of €240.0k
• The overall pay is comparable to the industry average
• Modulight Oyj's EPS declined by 3.4% over the past three years while total shareholder loss over the past three years was 76%

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Modulight Oyj (HEL:MODU) has not performed well recently and CEO Seppo Orsila will probably need to up their game. At the upcoming AGM on 1st of May, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Modulight Oyj

How Does Total Compensation For Seppo Orsila Compare With Other Companies In The Industry?

Our data indicates that Modulight Oyj has a market capitalization of €54m, and total annual CEO compensation was reported as €281k for the year to December 2024. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at €240.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Finnish Medical Equipment industry with market capitalizations below €176m, we found that the median total CEO compensation was €258k. This suggests that Modulight Oyj remunerates its CEO largely in line with the industry average. Furthermore, Seppo Orsila directly owns €7.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	€240k	€240k	85%
Other	€41k	€42k	15%
Total Compensation	€281k	€282k	100%

On an industry level, around 58% of total compensation represents salary and 42% is other remuneration. Modulight Oyj is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Modulight Oyj's Growth Numbers

Over the last three years, Modulight Oyj has shrunk its earnings per share by 3.4% per year. In the last year, its revenue is down 11%.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Modulight Oyj Been A Good Investment?

The return of -76% over three years would not have pleased Modulight Oyj shareholders. 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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Modulight Oyj (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

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.