David Richards has been the CEO of Liontown Resources Limited (ASX:LTR) since 2010. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does David Richards’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Liontown Resources Limited has a market cap of AU$27m, and is paying total annual CEO compensation of AU$410k. We note that’s an increase of 80% above last year. We took a group of companies with market capitalizations below AU$283m, and calculated the median CEO compensation to be AU$357k.
So David Richards is paid around the average of the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at Liontown Resources, below.
Is Liontown Resources Limited Growing?
Over the last three years Liontown Resources Limited has grown its earnings per share (EPS) by an average of 67% per year. In the last year, its revenue is down -90%.
This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end.
We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Liontown Resources Limited Been A Good Investment?
Boasting a total shareholder return of 306% over three years, Liontown Resources Limited has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.
David Richards is paid around the same as most CEOs of similar size companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. So one could argue the CEO compensation is quite modest, if you consider company performance! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Liontown Resources Limited.
Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .
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 firstname.lastname@example.org.