Herald Chen
AppLovinAbout Herald Chen
Herald Y. Chen, age 55, has served on AppLovin’s Board since August 2018. He was AppLovin’s President and Chief Financial Officer from November 2019 to December 2023. He holds a B.S. in Economics (Finance) and a B.S.E. in Mechanical Engineering from the University of Pennsylvania and an M.B.A. from Stanford Graduate School of Business. His core credentials include deep operating, financial and accounting expertise, and public company governance experience, including service on boards of public and private technology companies .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| AppLovin (APP) | President & CFO | Nov 2019 – Dec 2023 | Senior operating and financial leadership |
| AppLovin (APP) | Director | Aug 2018 – Present | Board oversight; no standing committee assignments |
| KKR | Head of TMT | 2007 – 2019; prior tenure 1995–1997 | Sector investing and governance expertise |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| GoDaddy, Inc. (NYSE: GDDY) | Director | Current | Public company oversight |
| Internet Brands Inc. | Director | Current | Private company governance |
Board Governance
- Independence: The Board determined six directors (Billings, Morgenfeld, Webb, Georgiadis, Harvey Dawson, Messing) are independent; Chen is not listed as independent . AppLovin is a “controlled company” because Foroughi and Chen (with affiliated trusts/entities) collectively hold a majority of voting power; despite this, all three standing committees are fully independent .
- Committee assignments: Chen currently serves on no standing committees. Audit: Morgenfeld (Chair), Billings, Georgiadis, Harvey Dawson, Webb; Compensation: Billings (Chair), Messing, Morgenfeld; Nominating & Corporate Governance: Georgiadis (Chair), Harvey Dawson, Messing, Webb .
- Attendance: In 2024, the Board held seven meetings; each director attended at least 89% of Board and committee meetings on which they served; aggregate director attendance was ~98%. Eight of nine directors attended the 2024 annual meeting .
- Voting influence: Under a Voting Agreement, all Class B shares held by Voting Agreement Parties (including Foroughi and Chen) are voted as determined by Foroughi and Chen, enabling significant influence over stockholder actions including director elections and major corporate transactions .
Fixed Compensation
| Component | 2024 Amount | Notes |
|---|---|---|
| Fees Paid or Earned in Cash | $0 | Chen did not receive director cash fees in 2024 |
| Stock Awards (Grant-Date Fair Value) | $0 | No 2024 director equity grant shown for Chen |
| All Other Compensation | $105,000 | Company-paid HSR Act filing fee approved by Board |
Director Compensation Policy (context; applies to non-employee directors generally):
- Cash retainers (2024 policy; parentheticals show Feb 2025 increases): Board member $50,000; Chair $60,000; Lead Independent Director $75,000; Audit Chair $35,000; Audit member $10,000; Compensation Chair $30,000; Compensation member $10,000; Nominating & Corporate Governance Chair $15,000 ($25,000); Nominating member $5,000 ($10,000). Members receive chair fee only, paid quarterly in arrears; directors may elect RSUs or options in lieu of cash .
- Initial equity award for new directors: $425,000 grant-date fair value (increased to $500,000 in Feb 2025), vesting in 12 equal quarterly installments; RSUs or options at director’s election .
- Annual equity award: $250,000 grant-date fair value (increased to $300,000 in Feb 2025), vest on earlier of 1-year anniversary or day prior to next annual meeting; RSUs or options .
- Change in control: Outstanding director awards fully vest upon change in control .
- Annual cap: $750,000 per fiscal year, $1,000,000 in initial year of service (GAAP grant-date value basis) .
Performance Compensation
| Performance Metric | Used for Director Compensation? | Source |
|---|---|---|
| Financial/TSR/ESG metrics tied to director pay | Not disclosed/Not used | Director equity awards are time-based RSUs/options; no performance metrics disclosed |
Other Directorships & Interlocks
| Topic | Detail |
|---|---|
| KKR Denali Director Nominations Agreement | Terminated in 2024 when KKR Denali fell below thresholds; previously had rights to nominate/approve certain directors |
| KKR-related financial arrangements | KKR Capital Markets LLC was a joint lead arranger/bookrunner for 2018 Credit Agreement; $0.1M fees paid in 2024 related to an amendment; KKR Corporate Lending provided $15M revolving commitments under the 2018 facility, terminated in Dec 2024 |
| Stock repurchases | March 6, 2024: Repurchase of 10,466,397 APP Class A shares from underwriters sourcing shares from KKR Denali at $54.46; March 7, 2024: Repurchase of 3,000,000 shares from Midterm Success at $60.74; disclosed as related party/greater than 5% holder transactions (KKR Denali was a related party) |
Expertise & Qualifications
- Financial/accounting expert; extensive operating and management experience; public company leadership and governance .
- Dual technical/finance education (UPenn B.S.E Mechanical Engineering; UPenn B.S. Economics–Finance; Stanford MBA) .
Equity Ownership
| Holding Category | Shares | Notes |
|---|---|---|
| Class A – Direct | 421,209 | Directly held by Chen |
| Class A – Chen Family 2012 Irrevocable Trust | 190,000 | Chen and spouse as trustees |
| Class A – 2023 High Street CRAT | 200,000 | Chen and spouse as trustees |
| Total Class A | 811,209 | Sum of above |
| Class B – Direct | 717,467 | Directly held by Chen |
| Class B – Options (exercisable within 60 days) | 1,680,201 | Subject to Equity Exchange Right Agreement; exercisable within 60 days |
| Total Class B (incl. exercisable options) | 2,397,668 | As shown in beneficial ownership table |
| Percent of Total Voting Power | 5.1% | As reported |
| Equity Exchange Right Agreement | 1,680,201 options unexercised as of 3/31/2025; right to exchange Class A (upon exercise) into Class B on a 1:1 basis (originally covered 2,280,201 options) | |
| Shares pledged as collateral | Not disclosed | Insider Trading Policy limits pledging to ≤10% of company securities held |
| Director Stock Ownership Guidelines | Non-employee directors must hold equity equal to 500% of annual Board cash retainer; counts shares/RSUs; excludes unexercised options and unearned performance awards; 5 years to comply |
Governance Assessment
- Governance structure: AppLovin is a controlled company; Foroughi and Chen, via a Voting Agreement, wield majority voting power. While the company voluntarily maintains fully independent committees and a majority-independent Board, Chen’s non-independent status and co-control materially influence governance outcomes (e.g., director elections, major transactions) .
- Committee roles: Chen sits on no standing committee, reducing direct involvement in audit/comp/nom-gov deliberations, while co-holding voting control—a separation that can concentrate influence outside committee processes .
- Attendance/engagement: Board attendance is strong (each director ≥89%, aggregate ~98%; 8/9 at 2024 annual meeting), supporting board effectiveness; specific individual attendance beyond this threshold is not separately disclosed .
- Compensation alignment: Chen received no director cash or equity compensation in 2024; only an HSR filing fee paid by the company ($105,000). Director equity awards are time-based, with no disclosed performance metrics, which reduces “pay-for-performance” alignment for directors but is typical for board pay structures .
- Ownership alignment: Significant beneficial ownership across Class A and Class B, plus an exchange right that can further increase Class B voting power, aligns Chen with shareholder value but can also entrench control given dual-class and Voting Agreement mechanics .
- Related party exposure: Historic KKR-related agreements and transactions were disclosed and largely terminated (nominations agreement; 2018 credit facility ended 12/2024). 2024 buybacks included shares sourced from KKR Denali and Midterm Success. No other related party transactions over $120,000 since Jan 1, 2024 were disclosed beyond those noted; Chen’s only 2024 director-related payment was the HSR fee .
- Policies and safeguards: Independent committees; lead independent director; executive sessions; clawback policy; insider trading/hedging/pledging restrictions; and stock ownership guidelines for directors provide governance mitigants .
RED FLAGS
- Controlled company and Voting Agreement: Concentrated voting control by Foroughi and Chen can override minority shareholder preferences, raising potential governance risk .
- Non-independent status: Chen is not classified as independent, given executive history and ongoing influence, which may affect perceptions of board objectivity .
- Equity Exchange Right: Ability to exchange into Class B could amplify voting power and entrench control over time .
Positive Signals
- Fully independent Audit, Compensation, and Nominating/Corporate Governance Committees; majority-independent Board; robust attendance and board processes; ownership guidelines; clawback policy; insider trading restrictions .
Overall, Chen combines deep operational and financial expertise with significant ownership and control influence. For investors, the key monitoring points are the exercise of the Equity Exchange Right, any changes to the Voting Agreement, and sustained independence/rigor within committees to balance the controlled company dynamics .