Should You Worry About ARMOUR Residential REIT Inc’s (NYSE:ARR) CEO Pay?

In 2009 Jeff Zimmer was appointed CEO of ARMOUR Residential REIT Inc (NYSE:ARR). 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 – 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.

View our latest analysis for ARMOUR Residential REIT

How Does Jeff Zimmer’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that ARMOUR Residential REIT Inc has a market cap of US$868m, and is paying total annual CEO compensation of US$374k. Notably, that’s an increase of 366% over the year before. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO compensation was US$1m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see a visual representation of the CEO compensation at ARMOUR Residential REIT, below.

NYSE:ARR CEO Compensation October 15th 18
NYSE:ARR CEO Compensation October 15th 18

Is ARMOUR Residential REIT Inc Growing?

On average over the last three years, ARMOUR Residential REIT Inc has grown earnings per share (EPS) by 86% each year. In the last year, its revenue is down -42%.

This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end.

You might want to check this free visual report on analyst forecasts for future earnings.

Has ARMOUR Residential REIT Inc Been A Good Investment?

I think that the total shareholder return of 39%, over three years, would leave most ARMOUR Residential REIT Inc shareholders smiling. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.

In Summary…

It looks like ARMOUR Residential REIT Inc pays its CEO less than similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. The strong history of shareholder returns might even have some thinking that Jeff Zimmer deserves a raise!

It’s not often we see shareholders do so well, and yet the CEO is paid modestly. The cherry on top would be if company insiders are buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling ARMOUR Residential REIT Inc shares (free trial).

Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of 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.