Shareholders May Be Wary Of Increasing Terveystalo Oyj's (HEL:TTALO) CEO Compensation Package

Key Insights

• Terveystalo Oyj's Annual General Meeting to take place on 26th of March
• Total pay for CEO Ville Iho includes €410.0k salary
• Total compensation is similar to the industry average
• Over the past three years, Terveystalo Oyj's EPS fell by 57% and over the past three years, the total loss to shareholders 34%

Terveystalo Oyj (HEL:TTALO) has not performed well recently and CEO Ville Iho will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 26th of March. 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Terveystalo Oyj

How Does Total Compensation For Ville Iho Compare With Other Companies In The Industry?

According to our data, Terveystalo Oyj has a market capitalization of €916m, and paid its CEO total annual compensation worth €637k over the year to December 2023. Notably, that's a decrease of 24% over the year before. We note that the salary portion, which stands at €410.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Finland Healthcare industry with market capitalizations ranging from €368m to €1.5b, the reported median CEO total compensation was €792k. So it looks like Terveystalo Oyj compensates Ville Iho in line with the median for the industry. Furthermore, Ville Iho directly owns €171k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	€410k	€400k	64%
Other	€227k	€434k	36%
Total Compensation	€637k	€834k	100%

On an industry level, roughly 58% of total compensation represents salary and 42% is other remuneration. It's interesting to note that Terveystalo 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.

Terveystalo Oyj's Growth

Over the last three years, Terveystalo Oyj has shrunk its earnings per share by 57% per year. It achieved revenue growth of 2.2% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Terveystalo Oyj Been A Good Investment?

With a total shareholder return of -34% over three years, Terveystalo Oyj shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

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.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Terveystalo 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.