Verkkokauppa.com Oyj's (HEL:VERK) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Verkkokauppa.com Oyj will host its Annual General Meeting on 8th of April
• Salary of €433.8k is part of CEO Panu Porkka's total remuneration
• Total compensation is 112% above industry average
• Over the past three years, Verkkokauppa.com Oyj's EPS fell by 118% and over the past three years, the total loss to shareholders 59%

Shareholders will probably not be too impressed with the underwhelming results at Verkkokauppa.com Oyj (HEL:VERK) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 8th of April. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Verkkokauppa.com Oyj

Comparing Verkkokauppa.com Oyj's CEO Compensation With The Industry

According to our data, Verkkokauppa.com Oyj has a market capitalization of €86m, and paid its CEO total annual compensation worth €489k over the year to December 2024. We note that's a decrease of 18% compared to last year. We note that the salary portion, which stands at €433.8k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Finland Multiline Retail industry with market capitalizations below €185m, reported a median total CEO compensation of €231k. Hence, we can conclude that Panu Porkka is remunerated higher than the industry median.

Component	2024	2023	Proportion (2024)
Salary	€434k	€394k	89%
Other	€55k	€204k	11%
Total Compensation	€489k	€598k	100%

On an industry level, total compensation is equally proportioned between salary and other compensation, that is, they each represent approximately 50% of the total compensation. According to our research, Verkkokauppa.com Oyj has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Verkkokauppa.com Oyj's Growth

Over the last three years, Verkkokauppa.com Oyj has shrunk its earnings per share by 118% per year. In the last year, its revenue is down 7.0%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Verkkokauppa.com Oyj Been A Good Investment?

Few Verkkokauppa.com Oyj shareholders would feel satisfied with the return of -59% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for Verkkokauppa.com Oyj you should be aware of, and 1 of them is concerning.

Switching gears from Verkkokauppa.com 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.