It's Unlikely That The CEO Of Innofactor Oyj (HEL:IFA1V) Will See A Huge Pay Rise This Year

Key Insights

• Innofactor Oyj to hold its Annual General Meeting on 27th of March
• Salary of €327.9k is part of CEO Sami Ensio's total remuneration
• Total compensation is similar to the industry average
• Innofactor Oyj's EPS grew by 27% over the past three years while total shareholder loss over the past three years was 16%

Shareholders of Innofactor Oyj (HEL:IFA1V) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 27th of March. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for Innofactor Oyj

Comparing Innofactor Oyj's CEO Compensation With The Industry

At the time of writing, our data shows that Innofactor Oyj has a market capitalization of €48m, and reported total annual CEO compensation of €375k for the year to December 2023. We note that's an increase of 11% above last year. We note that the salary portion, which stands at €327.9k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Finnish Software industry with market capitalizations under €183m, the reported median total CEO compensation was €423k. So it looks like Innofactor Oyj compensates Sami Ensio in line with the median for the industry. Furthermore, Sami Ensio directly owns €11m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	€328k	€314k	87%
Other	€47k	€24k	13%
Total Compensation	€375k	€338k	100%

Talking in terms of the industry, salary represented approximately 87% of total compensation out of all the companies we analyzed, while other remuneration made up 13% of the pie. Innofactor Oyj is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Innofactor Oyj's Growth

Over the past three years, Innofactor Oyj has seen its earnings per share (EPS) grow by 27% per year. In the last year, its revenue is up 13%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 Innofactor Oyj Been A Good Investment?

Since shareholders would have lost about 16% over three years, some Innofactor Oyj investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Innofactor Oyj that investors should look into moving forward.

Switching gears from Innofactor 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.