Roeland Baan became the CEO of Outokumpu Oyj (HEL:OUT1V) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Outokumpu Oyj
How Does Roeland Baan's Compensation Compare With Similar Sized Companies?
According to our data, Outokumpu Oyj has a market capitalization of €949m, and paid its CEO total annual compensation worth €2.7m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €1.1m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from €361m to €1.4b, and the median CEO total compensation was €824k.
As you can see, Roeland Baan is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Outokumpu Oyj is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Outokumpu Oyj has changed over time.
Is Outokumpu Oyj Growing?
Outokumpu Oyj has reduced its earnings per share by an average of 71% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down 6.8%.
Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Outokumpu Oyj Been A Good Investment?
With a three year total loss of 74%, Outokumpu Oyj would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We compared the total CEO remuneration paid by Outokumpu Oyj, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us. Arguably worse, investors are without a positive return for the last three years. In our opinion the CEO might be paid too generously! Moving away from CEO compensation for the moment, we've identified 2 warning signs for Outokumpu Oyj that you should be aware of before investing.
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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