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Roeland I. Baan became the CEO of Outokumpu Oyj (HEL:OUT1V) in 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Roeland I. Baan's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Outokumpu Oyj has a market cap of €1.1b, and is paying total annual CEO compensation of €2.7m. (This number is for the twelve months until December 2018). That's less than last year. While we always look at total compensation first, we note that the salary component is less, at €1.1m. We looked at a group of companies with market capitalizations from €890m to €2.8b, and the median CEO total compensation was €1.1m.
As you can see, Roeland I. Baan is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Outokumpu Oyj is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Outokumpu Oyj has changed over time.
Is Outokumpu Oyj Growing?
Outokumpu Oyj has reduced its earnings per share by an average of 6.7% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 10% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Outokumpu Oyj Been A Good Investment?
With a three year total loss of 19%, Outokumpu Oyj would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by Outokumpu Oyj, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
Arguably worse, investors are without a positive return for the last three years. Some might well form the view that the CEO is paid too generously! So you may want to check if insiders are buying Outokumpu Oyj shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.