Shareholders May Be More Conservative With Outokumpu Oyj's (HEL:OUT1V) CEO Compensation For Now

Key Insights

• Outokumpu Oyj's Annual General Meeting to take place on 4th of April
• CEO Heikki Malinen's total compensation includes salary of €986.2k
• Total compensation is 135% above industry average
• Outokumpu Oyj's EPS grew by 34% over the past three years while total shareholder loss over the past three years was 12%

As many shareholders of Outokumpu Oyj (HEL:OUT1V) will be aware, they have not made a gain on their investment in the past three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 4th of April could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Outokumpu Oyj

Comparing Outokumpu Oyj's CEO Compensation With The Industry

At the time of writing, our data shows that Outokumpu Oyj has a market capitalization of €1.7b, and reported total annual CEO compensation of €2.6m for the year to December 2023. Notably, that's an increase of 33% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at €986k.

For comparison, other companies in the Finland Metals and Mining industry with market capitalizations ranging between €927m and €3.0b had a median total CEO compensation of €1.1m. Hence, we can conclude that Heikki Malinen is remunerated higher than the industry median. Moreover, Heikki Malinen also holds €733k worth of Outokumpu Oyj stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	€986k	€900k	38%
Other	€1.6m	€1.1m	62%
Total Compensation	€2.6m	€2.0m	100%

On an industry level, around 62% of total compensation represents salary and 38% is other remuneration. In Outokumpu Oyj's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Outokumpu Oyj's Growth

Outokumpu Oyj's earnings per share (EPS) grew 34% per year over the last three years. It saw its revenue drop 27% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Outokumpu Oyj Been A Good Investment?

With a three year total loss of 12% for the shareholders, 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...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Outokumpu Oyj that investors should be aware of in a dynamic business environment.

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.