U.S. Markets closed
  • S&P Futures

    3,855.75
    +10.75 (+0.28%)
     
  • Dow Futures

    31,145.00
    +49.00 (+0.16%)
     
  • Nasdaq Futures

    13,371.50
    +77.25 (+0.58%)
     
  • Russell 2000 Futures

    2,158.60
    +0.90 (+0.04%)
     
  • Crude Oil

    53.28
    +0.04 (+0.08%)
     
  • Gold

    1,871.40
    +4.90 (+0.26%)
     
  • Silver

    26.01
    +0.24 (+0.95%)
     
  • EUR/USD

    1.2136
    +0.0021 (+0.1699%)
     
  • 10-Yr Bond

    1.0900
    -0.0020 (-0.18%)
     
  • Vix

    21.58
    -1.66 (-7.14%)
     
  • GBP/USD

    1.3686
    +0.0031 (+0.2258%)
     
  • USD/JPY

    103.5250
    -0.0450 (-0.0434%)
     
  • BTC-USD

    34,518.91
    -143.70 (-0.41%)
     
  • CMC Crypto 200

    685.15
    -15.46 (-2.21%)
     
  • FTSE 100

    6,740.39
    +27.44 (+0.41%)
     
  • Nikkei 225

    28,727.48
    +204.22 (+0.72%)
     

Does Aravive, Inc.'s (NASDAQ:ARAV) CEO Salary Compare Well With Others?

Simply Wall St

Jay Shepard has been the CEO of Aravive, Inc. (NASDAQ:ARAV) since 2015. 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.

Check out our latest analysis for Aravive

How Does Jay Shepard's Compensation Compare With Similar Sized Companies?

Our data indicates that Aravive, Inc. is worth US$75m, and total annual CEO compensation was reported as US$818k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$540k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$510k.

It would therefore appear that Aravive, Inc. pays Jay Shepard 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 get a better idea of how generous the pay is by looking at the performance of the underlying business.

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

NasdaqGS:ARAV CEO Compensation, November 3rd 2019
NasdaqGS:ARAV CEO Compensation, November 3rd 2019

Is Aravive, Inc. Growing?

On average over the last three years, Aravive, Inc. has grown earnings per share (EPS) by 40% each year (using a line of best fit). Its revenue is down 85% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Shareholders might be interested in this free visualization of analyst forecasts.

Has Aravive, Inc. Been A Good Investment?

With a three year total loss of 88%, Aravive, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared the total CEO remuneration paid by Aravive, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

However, the earnings per share growth over three years is certainly impressive. On the other hand returns to investors over the same period have probably disappointed many. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. So you may want to check if insiders are buying Aravive shares with their own money (free access).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.