Increases to TomTom N.V.'s (AMS:TOM2) CEO Compensation Might Cool off for now

Key Insights

• TomTom to hold its Annual General Meeting on 15th of April
• Salary of €586.0k is part of CEO Harold C. Goddijn's total remuneration
• The overall pay is 96% above the industry average
• Over the past three years, TomTom's EPS grew by 64% and over the past three years, the total loss to shareholders 43%

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In the past three years, the share price of TomTom N.V. (AMS:TOM2) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 15th of April. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for TomTom

Comparing TomTom N.V.'s CEO Compensation With The Industry

According to our data, TomTom N.V. has a market capitalization of €539m, and paid its CEO total annual compensation worth €1.6m over the year to December 2024. Notably, that's a decrease of 16% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at €586k.

For comparison, other companies in the the Netherlands Software industry with market capitalizations ranging between €183m and €730m had a median total CEO compensation of €795k. Hence, we can conclude that Harold C. Goddijn is remunerated higher than the industry median. What's more, Harold C. Goddijn holds €70m 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	€586k	€565k	38%
Other	€968k	€1.3m	62%
Total Compensation	€1.6m	€1.9m	100%

On an industry level, roughly 69% of total compensation represents salary and 31% is other remuneration. TomTom pays a modest slice of remuneration through salary, as compared 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.

TomTom N.V.'s Growth

TomTom N.V.'s earnings per share (EPS) grew 64% per year over the last three years. It saw its revenue drop 1.8% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings. .

Has TomTom N.V. Been A Good Investment?

With a total shareholder return of -43% over three years, TomTom N.V. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for TomTom that you should be aware of before investing.

Important note: TomTom 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.