Gavin Lockyer became the CEO of Arafura Resources Limited (ASX:ARU) in 2013. First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Arafura Resources

How Does Gavin Lockyer’s Compensation Compare With Similar Sized Companies?

Our data indicates that Arafura Resources Limited is worth AU$41m, and total annual CEO compensation is AU$423k. That’s below the compensation, last year. We looked at a group of companies with market capitalizations under AU$275m, and the median CEO compensation was AU$362k.

So Gavin Lockyer is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

The graphic below shows how CEO compensation at Arafura Resources has changed from year to year.

Is Arafura Resources Limited Growing?

Arafura Resources Limited has increased its earnings per share (EPS) by an average of 61% a year, over the last three years In the last year, its revenue is down -10%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important.

Although we don’t have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Arafura Resources Limited Been A Good Investment?

Arafura Resources Limited has served shareholders reasonably well, with a total return of 26% over three years. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary…

Gavin Lockyer is paid around the same as most CEOs of similar size companies.

We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. So upon reflection one could argue that the CEO pay is quite reasonable.

Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.

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.