People

The People

Governance grade: B. Founder-led with exceptionally tight skin in the game and almost no cash compensation at the top, but a dual-class structure that pins ~76% of voting power on two people, a classified board, and an audit committee weakened by losing its financial expert to the CFO seat. The behaviour is shareholder-friendly; the structure is not.

The People Running This Company

Duolingo is a true founder-operator company. Both co-founders are still in their executive seats fifteen years after starting the business, and three of the six executive officers have been with the company for at least seven years. The new CFO is a recent and consequential change: Gillian Munson moved from being the Audit Committee Chair to running finance, replacing Matthew Skaruppa after his January 2026 resignation.

What They Get Paid

The headline is that the CEO is paid almost nothing in cash and gets no new equity grants — and that is by design. Von Ahn received $767,500 in 2025 (mostly the $750,000 base salary plus a $17,500 401(k) match), the same package he has received every year since 2023. The Board decided at the 2021 IPO that the founder PSU award would be the exclusive equity grant to both co-founders for the entire ten-year post-IPO period. The CEO pay ratio is 2.6 to 1 versus the median employee — one of the lowest of any large-cap US technology company.

The non-founder NEOs are paid at competitive but not eye-popping levels for a $5B technology company: roughly 85-90% of total pay is delivered in time-based RSUs that vest quarterly over four years. There is no annual cash bonus, no PSUs for non-founders, and no perquisites — a clean, equity-heavy structure that suits a growth company but offers no operating metric to tie pay to outcomes.

The pay-versus-performance chart tells the real story. Reported CEO comp is a flat ~$767K line. "Compensation Actually Paid" — the mark-to-market value of the founder PSU — swings from +$140M in 2023 to negative $44M in 2025 as the stock fell. Von Ahn's economic outcomes are dominated almost entirely by share price, which is exactly what shareholders should want.

The Founder PSU — What's Left

Eight of the ten tranches have already been earned. With shares at $126 (May 2026), the last two — at $612 and $816 — would require a roughly five-to-six-fold appreciation by the July 2031 expiry. The remaining 420,000 CEO PSUs and 210,000 CTO PSUs represent enormous upside-only motivation that can only be realised if outside shareholders also win big.

Directors are paid fairly, not generously

Director pay is roughly $220-235K each, ~75% delivered in RSUs that vest annually — standard mid-cap-tech construction.

Are They Aligned?

This is the section where Duolingo is genuinely exceptional, with one structural caveat that limits how much credit it should get.

Ownership and Control

Class B common stock carries twenty votes per share and converts one-for-one into Class A on transfer. The two co-founders together hold 6.76M of the 6.36M outstanding Class B shares (the gap reflects vesting PSUs counted as outstanding) and command ~75.8% of total voting power despite holding only ~15.6% of economic interest. Class A holders — including every major institutional investor — collectively own 86% of the economic upside but control only 24% of the vote.

Insider Selling — Real but Programmatic

Insider monetisation in 2025 was substantial — the CEO realised $115M from PSU vesting and $11M from option exercises — but it was mechanical, tied to the pre-agreed PSU vesting calendar and option expirations. There is no evidence of opportunistic dumping above the published trading windows, and the dollars roughly tracked the stock-price hurdles being satisfied. Von Ahn also gifted 50,000 shares and converted Class B to Class A during the year, the latter of which actually reduces his voting power.

Dilution and Capital Allocation

The 2021 Plan has a 5% annual evergreen feature through 2031, which is large. The Board waived the equivalent automatic ESPP increase for 2026 and beyond — a small but real shareholder-friendly act. The combined overhang of 12.5M unissued shares plus 859K exercisable options is ~28% of basic Class A share count, so dilution risk is real but spread over multiple years. The company does not pay a dividend and has not bought back stock — both capital is being reinvested into the business and into share-based comp.

Related Party Transactions

The proxy discloses only indemnification agreements as related-party transactions. There is no founder-controlled supplier, no related-party real estate, no family employment, and no sweetheart financing. For a founder-controlled company, this is genuinely clean.

Skin-in-the-Game Scorecard

9 / 10. The behaviour and pay structure are about as aligned as a public company can be. The one point off reflects the fact that founder voting control is materially higher than founder economic ownership — alignment within the founder pair is perfect, but alignment between founders and the rest of the cap table is one-sided.

Board Quality

The board has nine directors: two founders and seven independents. That is a reasonable mix on paper. Below is how each director scores on independence, tenure, expertise, and committee load — and where the gaps are.

What's Strong

• Independent majority — 7 of 9 directors qualify as independent under Nasdaq rules.
• Real expertise, especially Bing Gordon (Kleiner Perkins, Zynga, EA — consumer/product/gaming), John Lilly (Greylock, Mozilla — open-source consumer tech), and Mario Schlosser (founder/operator at Oscar). Jim Shelton brings genuine education-sector experience.
• No interlocking directorships among the founders' other roles; von Ahn left the Root, Inc. board in 2022.
• All committee chairs are independent, all members of audit and compensation committees are independent, and the board has a written clawback policy, anti-hedging policy, and an Insider Trading Policy that requires window-based pre-clearance.
• Auditor independence is solid — Deloitte since 2018, $1.79M in audit fees, only $0.56M in tax fees (a healthy ratio that does not look like fee-stretching).

What's Weaker

• Audit Committee continuity loss. Gillian Munson — Audit Chair and designated financial expert — became CFO in February 2026. Sara Clemens has assumed both roles; the committee now relies on a single director for SEC-filing financial expertise and chair leadership. There is no immediate plan disclosed to recruit a replacement financial-expert director.
• Classified board with three-year staggered terms makes director change very slow even if Class A holders wanted to push it.
• Bing Gordon is 76 and has served since 2020. Not a problem yet, but a typical mandatory-retirement threshold would already have been triggered at peer companies.
• Sara Clemens carries an unusual committee load: she is Audit Chair, on Compensation, on Mergers and Acquisitions — that is three of the four standing committees, which is a lot for one person.
• Mario Schlosser is concurrently President of Technology and CTO at Oscar Health — a demanding day job that limits the time available for Comp-Committee chair duties.
• Eight late Form 4s in one year suggests the company's Section 16 compliance process is not tight.

The Verdict

Grade: B. Behaviour-wise, this is an A-minus governance set-up — a founder team with massive ownership, almost no cash compensation, fully stock-price-linked equity, no related-party self-dealing, an independent audit committee with a credible auditor, and a competent board with operating experience that actually matches the business. The downgrade is structural: the dual-class share scheme and classified board mean public shareholders have very limited recourse if behaviour ever changes, and the recent loss of the Audit Committee's financial-expert chair to the CFO chair has created an immediate gap that has not yet been filled.

Strongest positives

Founders hold ~16% of the economics and ~76% of the vote, take a fixed $750K cash salary, and have no annual bonus or non-PSU equity awards through 2031. The CEO's 2025 "Compensation Actually Paid" was negative $44M when the stock fell. Capital allocation has been clean — no buybacks, no dividend, no related-party transactions.

Real concerns

Class A holders carry 86% of the economic risk and only 24% of the vote, with a classified board on top. The Audit Committee lost its financial-expert chair when Munson took the CFO seat. Eight directors filed late Form 4s in 2025. The 2021 equity plan has a 5% annual evergreen feature through 2031.

The single thing that would most likely change the grade

Upgrade trigger: recruit a new audit-committee financial expert with a credible CFO/CPA background, AND signal that the dual-class structure has a sunset (e.g., a future seven-year sunset like Snap's). Either would move this toward a B+ or A-minus. Downgrade trigger: if von Ahn or Hacker were to receive a new equity award before 2031 outside the existing PSU framework, or if a material related-party transaction appeared in a future proxy, governance would slip to C territory because the only thing keeping the dual-class structure tolerable is the explicit ten-year pay commitment.