Here's Why Shareholders Will Not Be Complaining About Innofactor Oyj's (HEL:IFA1V) CEO Pay Packet

Key Insights

• Innofactor Oyj to hold its Annual General Meeting on 31st of March
• CEO Sami Ensio's total compensation includes salary of €314.0k
• The overall pay is comparable to the industry average
• Over the past three years, Innofactor Oyj's EPS grew by 100% and over the past three years, the total shareholder return was 99%

It would be hard to discount the role that CEO Sami Ensio has played in delivering the impressive results at Innofactor Oyj (HEL:IFA1V) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 31st of March. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for Innofactor Oyj

How Does Total Compensation For Sami Ensio Compare With Other Companies In The Industry?

At the time of writing, our data shows that Innofactor Oyj has a market capitalization of €44m, and reported total annual CEO compensation of €338k for the year to December 2022. That's a slight decrease of 6.9% on the prior year. We note that the salary portion, which stands at €314.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Finnish Software industry with market capitalizations under €186m, the reported median total CEO compensation was €332k. So it looks like Innofactor Oyj compensates Sami Ensio in line with the median for the industry. Moreover, Sami Ensio also holds €9.4m worth of Innofactor Oyj stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	€314k	€319k	93%
Other	€24k	€44k	7%
Total Compensation	€338k	€363k	100%

Talking in terms of the industry, salary represented approximately 91% of total compensation out of all the companies we analyzed, while other remuneration made up 9% of the pie. Our data reveals that Innofactor Oyj allocates salary more or less in line with the wider market. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Innofactor Oyj's Growth Numbers

Over the past three years, Innofactor Oyj has seen its earnings per share (EPS) grow by 100% per year. It achieved revenue growth of 7.2% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Innofactor Oyj Been A Good Investment?

We think that the total shareholder return of 99%, over three years, would leave most Innofactor Oyj shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for Innofactor Oyj that investors should be aware of in a dynamic business environment.

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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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.