Here's Why Shareholders May Consider Paying Elisa Oyj's (HEL:ELISA) CEO A Little More

Key Insights

• Elisa Oyj to hold its Annual General Meeting on 5th of April
• Salary of €674.6k is part of CEO Veli-Matti Mattila's total remuneration
• The total compensation is 33% less than the average for the industry
• Elisa Oyj's total shareholder return over the past three years was 9.6% while its EPS grew by 7.2% over the past three years

Shareholders will probably not be disappointed by the robust results at Elisa Oyj (HEL:ELISA) recently and they will be keeping this in mind as they go into the AGM on 5th of April. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

Check out our latest analysis for Elisa Oyj

Comparing Elisa Oyj's CEO Compensation With The Industry

At the time of writing, our data shows that Elisa Oyj has a market capitalization of €8.9b, and reported total annual CEO compensation of €2.0m for the year to December 2022. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at €675k.

For comparison, other companies in the Finland Telecom industry with market capitalizations above €7.4b, reported a median total CEO compensation of €3.0m. This suggests that Veli-Matti Mattila is paid below the industry median.

Component	2022	2021	Proportion (2022)
Salary	€675k	€661k	34%
Other	€1.3m	€1.3m	66%
Total Compensation	€2.0m	€2.0m	100%

On an industry level, roughly 63% of total compensation represents salary and 37% is other remuneration. It's interesting to note that Elisa Oyj allocates a smaller portion of compensation to salary 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.

Elisa Oyj's Growth

Over the past three years, Elisa Oyj has seen its earnings per share (EPS) grow by 7.2% per year. In the last year, its revenue is up 6.6%.

We'd prefer higher revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Elisa Oyj Been A Good Investment?

Elisa Oyj has not done too badly by shareholders, with a total return of 9.6%, over three years. It would be nice to see that metric improve in the future. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

In Summary...

Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Elisa Oyj (1 is potentially serious!) that you should be aware of before investing here.

Switching gears from Elisa 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.