We Discuss Why TietoEVRY Oyj's (HEL:TIETO) CEO Compensation May Be Closely Reviewed

Key Insights

• TietoEVRY Oyj will host its Annual General Meeting on 25th of March
• Total pay for CEO Kimmo Alkio includes €881.3k salary
• The overall pay is comparable to the industry average
• TietoEVRY Oyj's three-year loss to shareholders was 3.7% while its EPS was down 35% over the past three years

TietoEVRY Oyj (HEL:TIETO) has not performed well recently and CEO Kimmo Alkio will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 25th of March. 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for TietoEVRY Oyj

Comparing TietoEVRY Oyj's CEO Compensation With The Industry

Our data indicates that TietoEVRY Oyj has a market capitalization of €2.4b, and total annual CEO compensation was reported as €2.4m for the year to December 2024. Notably, that's a decrease of 34% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at €881k.

For comparison, other companies in the Finnish IT industry with market capitalizations ranging between €1.8b and €5.8b had a median total CEO compensation of €2.1m. From this we gather that Kimmo Alkio is paid around the median for CEOs in the industry. Furthermore, Kimmo Alkio directly owns €2.5m worth of shares in the company.

Talking in terms of the industry, salary represented approximately 62% of total compensation out of all the companies we analyzed, while other remuneration made up 38% 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.

A Look at TietoEVRY Oyj's Growth Numbers

Over the last three years, TietoEVRY Oyj has shrunk its earnings per share by 35% per year. In the last year, its revenue is down 1.7%.

The decline in EPS is a bit concerning. 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. 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 3.7% for the shareholders, TietoEVRY Oyj would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for TietoEVRY Oyj that investors should be aware of in a dynamic business environment.

Important note: TietoEVRY 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. 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.