We think Nokia Oyj's (HEL:NOKIA) CEO May Struggle To See Much Of A Pay Rise This Year

Key Insights

• Nokia Oyj's Annual General Meeting to take place on 3rd of April
• CEO Pekka Lundmark's total compensation includes salary of €1.32m
• The overall pay is comparable to the industry average
• Nokia Oyj's EPS grew by 87% over the past three years while total shareholder return over the past three years was 3.0%

Performance at Nokia Oyj (HEL:NOKIA) has been reasonably good and CEO Pekka Lundmark has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 3rd of April, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

Check out our latest analysis for Nokia Oyj

Comparing Nokia Oyj's CEO Compensation With The Industry

Our data indicates that Nokia Oyj has a market capitalization of €18b, and total annual CEO compensation was reported as €3.7m for the year to December 2023. That's a notable decrease of 61% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at €1.3m.

In comparison with other companies in the Finland Communications industry with market capitalizations over €7.4b, the reported median total CEO compensation was €4.3m. So it looks like Nokia Oyj compensates Pekka Lundmark in line with the median for the industry. Moreover, Pekka Lundmark also holds €4.9m worth of Nokia Oyj stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	€1.3m	€1.3m	35%
Other	€2.4m	€8.2m	65%
Total Compensation	€3.7m	€9.5m	100%

On an industry level, roughly 73% of total compensation represents salary and 27% is other remuneration. In Nokia Oyj's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Nokia Oyj's Growth

Over the past three years, Nokia Oyj has seen its earnings per share (EPS) grow by 87% per year. In the last year, its revenue is down 11%.

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 Nokia Oyj Been A Good Investment?

With a total shareholder return of 3.0% over three years, Nokia Oyj has done okay by shareholders, but there's always room for improvement. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to 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. In our study, we found 2 warning signs for Nokia Oyj you should be aware of, and 1 of them can't be ignored.

Important note: Nokia 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.