Mika Joukio has been the CEO of Metsä Board Oyj (HEL:METSB) since 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Mika Joukio's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Metsä Board Oyj has a market cap of €2.1b, and reported total annual CEO compensation of €2.6m for the year to December 2019. Notably, that's an increase of 13% over the year before. While we always look at total compensation first, we note that the salary component is less, at €512k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from €924m to €3.0b, and the median CEO total compensation was €1.4m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Metsä Board Oyj. On an industry level, roughly 53% of total compensation represents salary and 47% is other remuneration. Non-salary compensation represents a greater slice of the remuneration pie for Metsä Board Oyj, in sharp contrast to the overall sector.
Thus we can conclude that Mika Joukio receives more in total compensation than the median of a group of companies in the same market, and of similar size to Metsä Board Oyj. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. The graphic below shows how CEO compensation at Metsä Board Oyj has changed from year to year.
Is Metsä Board Oyj Growing?
Metsä Board Oyj has seen earnings per share (EPS) move positively by an average of 8.7% a year, over the last three years (using a line of best fit). In the last year, its revenue is down 1.2%.
I would prefer it if there was revenue growth, but I'm happy with the EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Shareholders might be interested in this free visualization of analyst forecasts.
Has Metsä Board Oyj Been A Good Investment?
Since shareholders would have lost about 5.9% over three years, some Metsä Board Oyj shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
We examined the amount Metsä Board Oyj pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. This doesn't look great when you consider CEO remuneration is up on last year. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. Shifting gears from CEO pay for a second, we've picked out 2 warning signs for Metsä Board Oyj that investors should be aware of in a dynamic business environment.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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