Should Shareholders Reconsider Solteq Oyj's (HEL:SOLTEQ) CEO Compensation Package?

Key Insights

• Solteq Oyj's Annual General Meeting to take place on 27th of March
• Salary of €350.0k is part of CEO Aarne Aktan's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, Solteq Oyj's EPS fell by 71% and over the past three years, the total loss to shareholders 78%

The results at Solteq Oyj (HEL:SOLTEQ) have been quite disappointing recently and CEO Aarne Aktan bears some responsibility for this. At the upcoming AGM on 27th of March, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Solteq Oyj

Comparing Solteq Oyj's CEO Compensation With The Industry

At the time of writing, our data shows that Solteq Oyj has a market capitalization of €15m, and reported total annual CEO compensation of €350k for the year to December 2024. This was the same as last year. Notably, the salary of €350k is the entirety of the CEO compensation.

On comparing similar-sized companies in the Finnish Software industry with market capitalizations below €184m, we found that the median total CEO compensation was €357k. So it looks like Solteq Oyj compensates Aarne Aktan in line with the median for the industry.

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. On a company level, Solteq Oyj prefers to reward its CEO through a salary, opting not to pay Aarne Aktan through non-salary benefits. 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 Solteq Oyj's Growth Numbers

Over the last three years, Solteq Oyj has shrunk its earnings per share by 71% per year. It saw its revenue drop 12% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Solteq Oyj Been A Good Investment?

Few Solteq Oyj shareholders would feel satisfied with the return of -78% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Solteq Oyj pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Solteq Oyj (1 is a bit unpleasant!) that you should be aware of before investing here.

Switching gears from Solteq 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.