Shareholders May Not Be So Generous With Tokmanni Group Oyj's (HEL:TOKMAN) CEO Compensation And Here's Why

Key Insights

• Tokmanni Group Oyj to hold its Annual General Meeting on 23rd of April
• Salary of €455.5k is part of CEO Mika Rautiainen's total remuneration
• The total compensation is 164% higher than the average for the industry
• Over the past three years, Tokmanni Group Oyj's EPS fell by 8.6% and over the past three years, the total loss to shareholders 21%

Shareholders of Tokmanni Group Oyj (HEL:TOKMAN) will have been dismayed by the negative share price return over the last three years. Per share earnings growth is also lacking, despite revenue growth. The AGM coming up on 23rd of April will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

See our latest analysis for Tokmanni Group Oyj

Comparing Tokmanni Group Oyj's CEO Compensation With The Industry

Our data indicates that Tokmanni Group Oyj has a market capitalization of €909m, and total annual CEO compensation was reported as €597k for the year to December 2023. Notably, that's a decrease of 30% over the year before. Notably, the salary which is €455.5k, represents most of the total compensation being paid.

On examining similar-sized companies in the Finland Multiline Retail industry with market capitalizations between €375m and €1.5b, we discovered that the median CEO total compensation of that group was €226k. This suggests that Mika Rautiainen is paid more than the median for the industry. Furthermore, Mika Rautiainen directly owns €2.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	€456k	€404k	76%
Other	€141k	€451k	24%
Total Compensation	€597k	€855k	100%

Talking in terms of the industry, salary represented approximately 49% of total compensation out of all the companies we analyzed, while other remuneration made up 51% of the pie. It's interesting to note that Tokmanni Group Oyj pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Tokmanni Group Oyj's Growth Numbers

Over the last three years, Tokmanni Group Oyj has shrunk its earnings per share by 8.6% per year. Its revenue is up 19% over the last year.

The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Tokmanni Group Oyj Been A Good Investment?

Since shareholders would have lost about 21% over three years, some Tokmanni Group Oyj investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

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. We've identified 2 warning signs for Tokmanni Group Oyj that investors should be aware of in a dynamic business environment.

Switching gears from Tokmanni Group 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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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.