Is Scanfil Oyj’s (HEL:SCANFL) CEO Pay Fair?
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Petteri Jokitalo became the CEO of Scanfil Oyj (HEL:SCANFL) in 2013. 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 process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Scanfil Oyj
How Does Petteri Jokitalo’s Compensation Compare With Similar Sized Companies?
Our data indicates that Scanfil Oyj is worth €272m, and total annual CEO compensation is €323k. (This is based on the year to 2015). We think total compensation is more important but we note that the CEO salary is lower, at €273k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of €177m to €710m. The median total CEO compensation was €481k.
A first glance this seems like a real positive for shareholders, since Petteri Jokitalo is paid less than the average compensation paid by similar sized companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Scanfil Oyj has changed from year to year.
Is Scanfil Oyj Growing?
Over the last three years Scanfil Oyj has grown its earnings per share (EPS) by an average of 75% per year (using a line of best fit). In the last year, its revenue is up 6.4%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has Scanfil Oyj Been A Good Investment?
I think that the total shareholder return of 40%, over three years, would leave most Scanfil Oyj shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary…
It appears that Scanfil Oyj remunerates its CEO below most similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that Petteri Jokitalo deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Scanfil Oyj.
Important note: Scanfil Oyj may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
