Mika Vehviläinen became the CEO of Cargotec Corporation (HEL:CGCBV) in 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. 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.

Check out our latest analysis for Cargotec

How Does Mika Vehviläinen's Compensation Compare With Similar Sized Companies?

Our data indicates that Cargotec Corporation is worth €1.9b, and total annual CEO compensation is €3.4m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at €701k. We looked at a group of companies with market capitalizations from €905m to €2.9b, and the median CEO total compensation was €1.1m.

As you can see, Mika Vehviläinen is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Cargotec Corporation is paying too much. 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 Cargotec has changed over time.

Is Cargotec Corporation Growing?

Cargotec Corporation has reduced its earnings per share by an average of 9.8% a year, over the last three years (measured with a line of best fit). Its revenue is up 8.4% over last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has Cargotec Corporation Been A Good Investment?

Given the total loss of 20% over three years, many shareholders in Cargotec Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We examined the amount Cargotec Corporation pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

Over the same period, investors would have come away with nothing in the way of share price gains. Some might well form the view that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Cargotec shares (free trial).

If you want to buy a stock that is better than Cargotec, this free list of high return, low debt companies is a great place to look.

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 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. Thank you for reading.