Is QPR Software Oyj’s (HEL:QPR1V) CEO Pay Fair?

Jari Jaakkola has been the CEO of QPR Software Oyj (HEL:QPR1V) since 2008. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for QPR Software Oyj

How Does Jari Jaakkola’s Compensation Compare With Similar Sized Companies?

Our data indicates that QPR Software Oyj is worth €20m, and total annual CEO compensation is €231k. (This is based on the year to 2016). While we always look at total compensation first, we note that the salary component is less, at €196k. We looked at a group of companies with market capitalizations under €177m, and the median CEO compensation was €182k.

That means Jari Jaakkola receives fairly typical remuneration for the CEO of a company that size. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance. Take a look at QPR Software Oyj’s growth trajectory by checking out this more detailed historical graph of earnings, revenue and cash flow.

The graphic below shows how CEO compensation at QPR Software Oyj has changed from year to year.

HLSE:QPR1V CEO Compensation December 3rd 18
HLSE:QPR1V CEO Compensation December 3rd 18

Is QPR Software Oyj Growing?

On average over the last three years, QPR Software Oyj has shrunk earnings per share by 24% each year. In the last year, its revenue is down -4.4%.

Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.

Has QPR Software Oyj Been A Good Investment?

I think that the total shareholder return of 35%, over three years, would leave most QPR Software Oyj shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

Jari Jaakkola is paid around the same as most CEOs of similar size companies.

We’re not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we can’t see a reason to suggest the pay is inappropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at QPR Software Oyj.

Important note: QPR Software Oyj may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.