Shareholders May Find It Hard To Justify Increasing AS Harju Elekter's (TAL:HAE1T) CEO Compensation For Now

Key Insights

• AS Harju Elekter will host its Annual General Meeting on 24th of April
• Total pay for CEO Tiit Atso includes €164.0k salary
• The overall pay is comparable to the industry average
• AS Harju Elekter's EPS grew by 5.7% over the past three years while total shareholder loss over the past three years was 31%

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In the past three years, the share price of AS Harju Elekter (TAL:HAE1T) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 24th of April. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for AS Harju Elekter

How Does Total Compensation For Tiit Atso Compare With Other Companies In The Industry?

At the time of writing, our data shows that AS Harju Elekter has a market capitalization of €86m, and reported total annual CEO compensation of €213k for the year to December 2024. Notably, that's an increase of 34% over the year before. Notably, the salary which is €164.0k, represents most of the total compensation being paid.

In comparison with other companies in the Europe Electrical industry with market capitalizations under €176m, the reported median total CEO compensation was €285k. So it looks like AS Harju Elekter compensates Tiit Atso in line with the median for the industry. What's more, Tiit Atso holds €142k worth of shares in the company in their own name.

Component	2024	2023	Proportion (2024)
Salary	€164k	€150k	77%
Other	€49k	€9.0k	23%
Total Compensation	€213k	€159k	100%

Talking in terms of the broader industry, salary and other compensation roughly make up 50% each, of the total compensation. According to our research, AS Harju Elekter has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

AS Harju Elekter's Growth

Over the past three years, AS Harju Elekter has seen its earnings per share (EPS) grow by 5.7% per year. It saw its revenue drop 16% over the last year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has AS Harju Elekter Been A Good Investment?

Few AS Harju Elekter shareholders would feel satisfied with the return of -31% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for AS Harju Elekter you should be aware of, and 1 of them shouldn't be ignored.

Important note: AS Harju Elekter is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.