Stock Analysis

This Is The Reason Why We Think Kemira Oyj's (HEL:KEMIRA) CEO Might Be Underpaid

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Key Insights

  • Kemira Oyj's Annual General Meeting to take place on 22nd of March
  • CEO Jari Rosendal's total compensation includes salary of €738.6k
  • The total compensation is 40% less than the average for the industry
  • Kemira Oyj's EPS grew by 28% over the past three years while total shareholder return over the past three years was 119%

The solid performance at Kemira Oyj (HEL:KEMIRA) has been impressive and shareholders will probably be pleased to know that CEO Jari Rosendal has delivered. This would be kept in mind at the upcoming AGM on 22nd of March which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

Check out our latest analysis for Kemira Oyj

Comparing Kemira Oyj's CEO Compensation With The Industry

At the time of writing, our data shows that Kemira Oyj has a market capitalization of €2.4b, and reported total annual CEO compensation of €1.5m for the year to December 2022. We note that's a small decrease of 5.4% on last year. In particular, the salary of €738.6k, makes up a fairly large portion of the total compensation being paid to the CEO.

In comparison with other companies in the Finland Chemicals industry with market capitalizations ranging from €1.9b to €6.1b, the reported median CEO total compensation was €2.4m. In other words, Kemira Oyj pays its CEO lower than the industry median. Furthermore, Jari Rosendal directly owns €3.0m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20222021Proportion (2022)
Salary €739k €724k 51%
Other €715k €813k 49%
Total Compensation€1.5m €1.5m100%

On an industry level, roughly 45% of total compensation represents salary and 55% is other remuneration. Kemira Oyj is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

HLSE:KEMIRA CEO Compensation March 16th 2023

Kemira Oyj's Growth

Kemira Oyj's earnings per share (EPS) grew 28% per year over the last three years. In the last year, its revenue is up 33%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Kemira Oyj Been A Good Investment?

Boasting a total shareholder return of 119% over three years, Kemira Oyj has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Kemira Oyj that investors should think about before committing capital to this stock.

Switching gears from Kemira Oyj, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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