We Think Shareholders May Want To Consider A Review Of Tecnotree Oyj's (HEL:TEM1V) CEO Compensation Package

Key Insights

• Tecnotree Oyj will host its Annual General Meeting on 7th of April
• CEO Padma Ravichander's total compensation includes salary of €960.0k
• The overall pay is 409% above the industry average
• Tecnotree Oyj's EPS declined by 25% over the past three years while total shareholder loss over the past three years was 86%

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The results at Tecnotree Oyj (HEL:TEM1V) have been quite disappointing recently and CEO Padma Ravichander bears some responsibility for this. At the upcoming AGM on 7th of April, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Tecnotree Oyj

How Does Total Compensation For Padma Ravichander Compare With Other Companies In The Industry?

Our data indicates that Tecnotree Oyj has a market capitalization of €53m, and total annual CEO compensation was reported as €1.8m for the year to December 2024. We note that's a decrease of 47% compared to last year. Notably, the salary which is €960.0k, represents a considerable chunk of the total compensation being paid.

For comparison, other companies in the Finnish Software industry with market capitalizations below €185m, reported a median total CEO compensation of €350k. Accordingly, our analysis reveals that Tecnotree Oyj pays Padma Ravichander north of the industry median. What's more, Padma Ravichander holds €6.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	€960k	€1.1m	54%
Other	€821k	€2.3m	46%
Total Compensation	€1.8m	€3.4m	100%

On an industry level, around 87% of total compensation represents salary and 13% is other remuneration. In Tecnotree Oyj's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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.

Tecnotree Oyj's Growth

Over the last three years, Tecnotree Oyj has shrunk its earnings per share by 25% per year. Its revenue is down 8.7% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Tecnotree Oyj Been A Good Investment?

Few Tecnotree Oyj shareholders would feel satisfied with the return of -86% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Tecnotree Oyj (1 can't be ignored!) that you should be aware of before investing here.

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.