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Is Vaisala Oyj's (HEL:VAIAS) CEO Overpaid Relative To Its Peers?

Simply Wall St

Kjell Forsén has been the CEO of Vaisala Oyj (HEL:VAIAS) since 2006. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Vaisala Oyj

How Does Kjell Forsén's Compensation Compare With Similar Sized Companies?

According to our data, Vaisala Oyj has a market capitalization of €1.0b, and paid its CEO total annual compensation worth €1.6m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €515k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from €361m to €1.4b, and the median CEO total compensation was €501k.

It would therefore appear that Vaisala Oyj pays Kjell Forsén more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at Vaisala Oyj has changed over time.

HLSE:VAIAS CEO Compensation, December 4th 2019

Is Vaisala Oyj Growing?

Vaisala Oyj has increased its earnings per share (EPS) by an average of 9.6% a year, over the last three years (using a line of best fit). Its revenue is up 15% over last year.

I would argue that the modest growth in revenue is a notable positive. And, while modest, the earnings per share growth is noticeable. Although we'll stop short of calling the stock a top performer, we think the company has potential. You might want to check this free visual report on analyst forecasts for future earnings.

Has Vaisala Oyj Been A Good Investment?

Most shareholders would probably be pleased with Vaisala Oyj for providing a total return of 96% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

We compared the total CEO remuneration paid by Vaisala Oyj, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Over the last three years returns to investors have been great, though we might have liked stronger business growth. So, considering these tasty returns, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying Vaisala 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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

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. Thank you for reading.