Here's Why We Think Sampo Oyj's (HEL:SAMPO) CEO Compensation Looks Fair for the time being

Key Insights

• Sampo Oyj to hold its Annual General Meeting on 23rd of April
• Salary of €4.26m is part of CEO Torbjorn Magnusson's total remuneration
• Total compensation is similar to the industry average
• Sampo Oyj's total shareholder return over the past three years was 23% while its EPS was down 22% over the past three years

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Despite positive share price growth of 23% for Sampo Oyj (HEL:SAMPO) over the last few years, earnings growth has been disappointing, which suggests something is amiss. The upcoming AGM on 23rd of April may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

Check out our latest analysis for Sampo Oyj

How Does Total Compensation For Torbjorn Magnusson Compare With Other Companies In The Industry?

At the time of writing, our data shows that Sampo Oyj has a market capitalization of €24b, and reported total annual CEO compensation of €4.3m for the year to December 2024. Notably, that's an increase of 36% over the year before. Notably, the salary of €4.3m is the entirety of the CEO compensation.

For comparison, other companies in the Finland Insurance industry with market capitalizations above €7.0b, reported a median total CEO compensation of €4.2m. From this we gather that Torbjorn Magnusson is paid around the median for CEOs in the industry.

Talking in terms of the industry, salary represented approximately 40% of total compensation out of all the companies we analyzed, while other remuneration made up 60% of the pie. On a company level, Sampo Oyj prefers to reward its CEO through a salary, opting not to pay Torbjorn Magnusson through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Sampo Oyj's Growth Numbers

Over the last three years, Sampo Oyj has shrunk its earnings per share by 22% per year. Its revenue is up 15% over the last year.

Overall this is not a very positive result for shareholders. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Sampo Oyj Been A Good Investment?

With a total shareholder return of 23% over three years, Sampo Oyj shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Sampo Oyj rewards its CEO solely through a salary, ignoring non-salary benefits completely. While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

Shareholders may want to check for free if Sampo Oyj insiders are buying or selling shares.

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.