Increases to TietoEVRY Oyj's (HEL:TIETO) CEO Compensation Might Cool off for now

Key Insights

• TietoEVRY Oyj's Annual General Meeting to take place on 13th of March
• CEO Kimmo Alkio's total compensation includes salary of €850.2k
• The total compensation is 155% higher than the average for the industry
• Over the past three years, TietoEVRY Oyj's EPS grew by 22% and over the past three years, the total loss to shareholders 5.6%

In the past three years, shareholders of TietoEVRY Oyj (HEL:TIETO) have seen a loss on their investment. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 13th of March. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for TietoEVRY Oyj

Comparing TietoEVRY Oyj's CEO Compensation With The Industry

At the time of writing, our data shows that TietoEVRY Oyj has a market capitalization of €2.5b, and reported total annual CEO compensation of €3.6m for the year to December 2023. Notably, that's an increase of 62% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at €850k.

On comparing similar companies from the Finnish IT industry with market caps ranging from €1.8b to €5.9b, we found that the median CEO total compensation was €1.4m. Accordingly, our analysis reveals that TietoEVRY Oyj pays Kimmo Alkio north of the industry median. Furthermore, Kimmo Alkio directly owns €2.2m worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	€850k	€825k	23%
Other	€2.8m	€1.4m	77%
Total Compensation	€3.6m	€2.2m	100%

Talking in terms of the industry, salary represented approximately 76% of total compensation out of all the companies we analyzed, while other remuneration made up 24% of the pie. TietoEVRY Oyj pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

TietoEVRY Oyj's Growth

TietoEVRY Oyj has seen its earnings per share (EPS) increase by 22% a year over the past three years. It saw its revenue drop 2.6% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has TietoEVRY Oyj Been A Good Investment?

With a three year total loss of 5.6% for the shareholders, TietoEVRY Oyj would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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. In our study, we found 2 warning signs for TietoEVRY Oyj you should be aware of, and 1 of them is a bit unpleasant.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.