Here's Why We Think QPR Software Oyj's (HEL:QPR1V) CEO Compensation Looks Fair for the time being

The share price of QPR Software Oyj (HEL:QPR1V) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. The upcoming AGM on 25 March 2021 may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

See our latest analysis for QPR Software Oyj

How Does Total Compensation For Jari Jaakkola Compare With Other Companies In The Industry?

At the time of writing, our data shows that QPR Software Oyj has a market capitalization of €25m, and reported total annual CEO compensation of €192k for the year to December 2020. That's a slight decrease of 4.3% on the prior year. It is worth noting that the CEO compensation consists entirely of the salary, worth €192k.

On comparing similar-sized companies in the industry with market capitalizations below €168m, we found that the median total CEO compensation was €251k. This suggests that QPR Software Oyj remunerates its CEO largely in line with the industry average. Furthermore, Jari Jaakkola directly owns €511k worth of shares in the company.

Component	2020	2019	Proportion (2020)
Salary	€192k	€201k	100%
Other	-	-	-
Total Compensation	€192k	€201k	100%

Speaking on an industry level, nearly 97% of total compensation represents salary, while the remainder of 3% is other remuneration. Speaking on a company level, QPR Software Oyj prefers to tread along a traditional path, disbursing all compensation through a salary. 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.

QPR Software Oyj's Growth

Over the last three years, QPR Software Oyj has shrunk its earnings per share by 25% per year. It saw its revenue drop 5.7% over the last year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has QPR Software Oyj Been A Good Investment?

QPR Software Oyj has generated a total shareholder return of 26% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

QPR Software Oyj pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which is potentially serious) in QPR Software Oyj we think you should know about.

Important note: QPR Software Oyj is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. 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.
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