Lawrence Cheng
About Lawrence Cheng
Chi Fung (Lawrence) Cheng, 56, is Credo’s co‑founder, Chief Technology Officer, and a director, roles he has held since September 2014 (previously CTO and director of Credo’s predecessor from 2008–2014). He holds an M.S. in Electrical Engineering from Purdue University. FY2025 incentive outcomes were tied to strong operating performance: company metrics reflected revenue growth of 126% and non‑GAAP net income growth of 30% year over year for the full year, contributing to a 175% of target annual bonus payout for NEOs, including Cheng. His background includes senior analog design leadership at Marvell (1997–2008) and engineering at Actel (1994–1997) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Credo Technology Group Holding Ltd. | Chief Technology Officer and Director | 2014–present | Co‑founder; long‑tenured technology leadership at board level |
| Credo predecessor entity | Chief Technology Officer and Director | 2008–2014 | Led technology through predecessor phase prior to current structure |
| Marvell | Engineering Director, Analog Design | 1997–2008 | Senior leadership in analog design for a major semiconductor company |
| Actel Corporation | Staff Engineer | 1994–1997 | Integrated circuits engineering experience |
Fixed Compensation
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Base Salary ($) | 355,833 | 373,625 | 358,448 |
| Stock Awards ($) | 1,209,000 | — | 1,092,500 |
| Non‑Equity Incentive/Bonus ($) | 179,375 | 96,469 | 325,359 |
| Total ($) | 1,744,208 | 470,094 | 1,776,307 |
- FY2025 target bonus opportunity for Cheng: 50% of base salary; FY2025 target bonus amount shown as $200,000 in plan-based awards table .
- 2024 proxy clarified that although Cheng voluntarily relinquished his FY2023 base salary/bonus at the time, the company determined he “constructively received” them (administrative clarification) .
Performance Compensation
Annual Bonus Plan (FY2025 design and outcomes)
| Component | Weight | Threshold | Target | Maximum | Actual FY2025 Outcome | Payout vs Target |
|---|---|---|---|---|---|---|
| Company-level metric: sum of Revenue growth + Non‑GAAP NI growth (two performance periods) | 75% | 20.5% | 40% | 60% | 1H: 81% (Rev 66%, NI 15%); FY: 156% (Rev 126%, NI 30%) | 1H: 50%; FY: 150% (of annualized target component) |
| Individual performance | 25% | — | 100% | 100% | Achieved at target | 100% |
| Total | — | — | — | — | — | 175% of target (Cheng paid $349,117) |
- FY2025 NEO payout summary shows Cheng’s bonus at $349,117; plan weights: 75% company, 25% individual; two performance periods (1H cap at 50% of annualized target; 2H up to 150%) .
Long‑Term Equity Awards
| Grant Date | Award Type | Performance Metric | Threshold (#) | Target (#) | Max (#) | Vesting | Grant Date Fair Value ($) |
|---|---|---|---|---|---|---|---|
| 3/7/2025 | PSUs | FY2026 revenue goals; 0–200% earn-out | 12,500 | 25,000 | 50,000 | 25% of earned PSUs on each of Jun 10, 2026/2027/2028/2029 (service-based post‑performance) | 1,092,500 |
| 1/5/2023 | RSUs | Time-based | — | 100,000 | — | 25% after 1 year, then equal quarterly installments over 3 years | 1,209,000 |
- In FY2025, Credo shifted annual executive grants to 100% PSUs (excluding new-hire grants) to strengthen pay-for-performance alignment; ownership guidelines were also adopted .
Recent Vesting and Realized Value
| Fiscal Year | Shares Vested (#) | Value Realized on Vesting ($) |
|---|---|---|
| 2024 | 56,250 | 1,039,813 |
Equity Ownership & Alignment
Beneficial Ownership (multi‑year)
| As of (Record Date) | Shares Beneficially Owned (#) | % of Outstanding |
|---|---|---|
| 7/31/2023 | 10,999,552 | 7.35% |
| 7/31/2024 | 9,380,493 | 5.65% |
| 7/31/2025 | 7,241,651 | 4.19% |
2025 Detailed Breakdown (as of 7/31/2025)
| Component | Shares |
|---|---|
| Directly held | 11,799 |
| Cheng Huang Family Trust U/T/A DTD 12/22/2003 | 7,223,602 (shared voting/investment power; beneficial ownership disclaimed except to extent of pecuniary interest) |
| RSUs vesting within 60 days | 6,250 |
- Anti‑hedging/pledging: Company policy prohibits all hedging and pledging of company securities by employees and directors .
- Stock ownership guidelines (effective 3/20/2025): CEO 3x salary; other executive officers 1x salary; directors 4x annual cash retainer; four years to comply; unvested/unearned awards don’t count .
Employment Terms
- No individual employment agreement; Cheng is party to a Confidential Information and Invention Assignment Agreement with restrictive covenants: 24‑month post‑termination non‑solicitation of employees/consultants and perpetual restrictions on use of confidential information to solicit clients/customers toward competitors .
- Change‑in‑Control (CIC) Severance Plan (adopted 12/3/2024; double‑trigger): Upon qualifying termination within −3 to +12 months of a CIC, Cheng receives lump‑sum cash equal to 1.0x (base salary + target bonus), full accelerated vesting of all unvested equity (performance awards at target), COBRA lump‑sum (12 months of company cost), and any earned but unpaid prior bonus; best‑net 280G cutback (no excise tax gross‑ups) .
Estimated CIC termination values (assumed event on 5/3/2025)
| Component | Amount ($) |
|---|---|
| Cash severance (1.0x salary + target bonus) | 600,000 |
| Health insurance (COBRA) lump‑sum | 54,596 |
| Accelerated vesting of equity | 3,921,125 |
| Total | 4,575,721 |
- Clawback policy: Adopted Nov 2023; compliant with SEC/Nasdaq; recovers incentive‑based compensation for 3 prior fiscal years in event of restatement .
- Insider trading policy: prohibits hedging and pledging by all insiders .
Board Governance and Service
| Attribute | Detail |
|---|---|
| Board class/term | Class I director; nominated for term expiring at 2028 AGM |
| Director since | 2014 |
| Independence | Employee director; not independent (board majority is independent) |
| Committees | Not listed as a member; standing committees (Audit, Compensation, NCG) are staffed by independent directors |
| Board structure notes | Board has nine directors; majority independent; committee chairs independent; 2025: Lip‑Bu Tan stepped down as Chair after becoming Intel CEO given revenue ties (independence consideration) |
Director Compensation (context)
- Non‑employee director compensation includes a $50,000 cash retainer (committee retainers/chairs incremental) and annual RSU grants valued at $175,000; employee directors are not included in the non‑employee director compensation table .
Additional Signals and Governance Disclosures
- Say‑on‑Pay: 88% approval for FY2024 NEO compensation, after which the committee increased performance‑based equity mix and adopted ownership guidelines .
- Compensation peer group: FY2025 review used 18 semiconductor and related peers to inform pay decisions, advised by independent consultant Compensia .
- Section 16 compliance: 2023 proxy noted certain late Form 4 filings for multiple insiders including Cheng (administrative errors) .
Investment Implications
- Pay-for-performance alignment is improving: 100% PSU refresh grants in FY2025 and a formulaic annual bonus tied 75% to company financial growth and 25% to individual goals reinforce linkage; FY2025 payout of 175% of target followed materially higher revenue and non‑GAAP net income growth .
- Retention risk moderated by CIC protections and multi‑year vesting: Double‑trigger CIC at 1.0x cash plus full acceleration at target, combined with PSU performance period and four‑year vesting cadence (with June vest dates), incentivize continued service through FY2026–FY2029; recent adoption of ownership guidelines further aligns interests .
- Insider supply/ownership trend: Cheng’s beneficial ownership declined from 7.35% (2013/2024 proxy year) to 4.19% as of 7/31/2025, with most holdings via a family trust; while the anti‑hedge/pledge policy mitigates alignment risks, declining insider concentration bears monitoring for potential selling pressure signals around vesting dates .
- Governance quality supports oversight despite dual role: Cheng is a non‑independent management director with no committee roles; however, committee structures are independent and board independence remains a majority, which helps mitigate dual‑role concerns .
References
- 2025 DEF 14A (filed 8/25/2025): board composition, biographies, compensation tables, bonus metrics, ownership, CIC plan, policies .
- 2024 DEF 14A (filed 8/26/2024): ownership, director compensation, vesting realized values, policy clarifications .
- 2023 DEF 14A (filed 8/21/2023): RSU grant structure, multi‑year ownership baseline, Section 16 note .