Duolingo (NASDAQ: DUOL) CTO Severin Hacker exercises 60K PSUs with tax withholding
Filing Impact
Filing Sentiment
Form Type
4
Rhea-AI Filing Summary
Duolingo, Inc. director and CTO/co-founder Severin Hacker reported equity compensation activity involving performance-based restricted stock units (PSUs) tied to the company’s Class B Common Stock. On this Form 4, 60,000 PSUs were exercised into 60,000 shares of Class B Common Stock at a conversion price of $0.00 per share, reflecting the vesting of a portion of his long-term incentive award. To cover tax obligations, 31,920 shares of Class B Common Stock were disposed of in a tax-withholding transaction at $107.82 per share, which is not an open-market sale. Following these transactions, Hacker holds 205,273 shares of Class B Common Stock directly and 72 shares of Class A Common Stock directly, plus 2,836,917 shares of Class B Common Stock indirectly through the SBH Trust dated March 10, 2020, of which he is trustee. Each PSU represents a contingent right to receive one share of Class B Common Stock, subject to both service-based vesting tied to anniversaries of Duolingo’s IPO and performance-based stock price hurdles over a ten-year period, with settled shares generally delivered on the first anniversary of vesting.
Positive
- None.
Negative
- None.
Insider Trade Summary
120,000 shares exercised/converted
Mixed
5 txns
Insider
Hacker Severin
Role
Chief Tech Officer, Co-Founder
| Type | Security | Shares | Price | Value |
|---|---|---|---|---|
| Exercise | Performance-Based Restricted Stock Units | 60,000 | $0.00 | -- |
| Exercise | Class B Common Stock | 60,000 | $0.00 | -- |
| Tax Withholding | Class B Common Stock | 31,920 | $107.82 | $3.44M |
| holding | Class B Common Stock | -- | -- | -- |
| holding | Class A Common Stock | -- | -- | -- |
Holdings After Transaction:
Performance-Based Restricted Stock Units — 210,000 shares (Direct, null);
Class B Common Stock — 237,193 shares (Direct, null);
Class B Common Stock — 2,836,917 shares (Indirect, See footnote);
Class A Common Stock — 72 shares (Direct, null)
Footnotes (1)
- Each Performance-Based Restricted Stock Unit ("PSU") represents a contingent right to receive one share of the Issuer's Class B Common Stock upon vesting. The PSUs vest upon the satisfaction of both a service-based condition and a performance-based condition. The service-based condition is satisfied as to 25% of the PSUs on each anniversary of the completion of the Issuer's initial public offering of Class A common stock based on the Reporting Person's continuous service as CTO to the Issuer through the applicable vesting dates, subject to acceleration upon a cessation of service as CTO as a result of death or permanent disability. The performance-based condition will be satisfied upon the Issuer's Class A common stock achieving certain stock price hurdles over a period of ten years. Vested PSUs will be settled by the issuance of the underlying Class B Common Stock on the first anniversary of vesting, subject to acceleration upon a termination of employment or a change in control of the Issuer. Each share of Class B Common Stock is convertible at any time at the option of the Reporting Person into one share of Class A Common Stock and has no expiration date. Each share of Class B Common Stock will convert automatically into one share of Class A Common Stock in connection with: (i) any transfer, whether or not for value, except for certain permitted transfers further described in the Issuer's amended and restated certificate of incorporation, (ii) such time as the aggregate number of shares of Class B Common Stock outstanding ceases to represent 5% of the aggregate number of shares of Common Stock outstanding, and (iii) the death of the Reporting Person. Shares held by SBH Trust dated March 10, 2020, of which Reporting Person is Trustee.
Key Figures
PSUs exercised: 60,000 shares
Tax-withholding disposition: 31,920 shares at $107.82
Direct Class B holdings after: 205,273 shares
+3 more
6 metrics
PSUs exercised
60,000 shares
Performance-Based Restricted Stock Units converted to Class B Common Stock
Tax-withholding disposition
31,920 shares at $107.82
Shares delivered to satisfy tax liability on equity compensation
Direct Class B holdings after
205,273 shares
Class B Common Stock directly owned following reported transactions
Indirect Class B holdings
2,836,917 shares
Class B Common Stock held via SBH Trust dated March 10, 2020
Direct Class A holdings
72 shares
Class A Common Stock directly owned following reported transactions
PSU expiration
June 21, 2031
Expiration date for Performance-Based Restricted Stock Units
Key Terms
Performance-Based Restricted Stock Units, tax-withholding disposition, Class B Common Stock, contingent right, +1 more
5 terms
Performance-Based Restricted Stock Units financial
"Each Performance-Based Restricted Stock Unit ("PSU") represents a contingent right to receive one share..."
Performance-based restricted stock units are a type of employee equity award that converts into company shares only if predefined financial or operational targets are met over a set period. Think of it like a bonus check that becomes stock only when specific goals are hit; it ties pay to results, aligning managers’ incentives with shareholders. Investors care because these awards affect future share count, executive incentives, and signal how management’s success will be measured and rewarded.
tax-withholding disposition financial
"Payment of exercise price or tax liability by delivering securities"
A tax-withholding disposition is an event or transaction—such as selling or transferring securities, exercising options, or receiving compensation—that triggers a requirement to hold back part of the payment and remit it to tax authorities. It matters to investors because it reduces the cash they receive immediately and can change the timing and amount of taxable income, like a cashier taking a portion of your sale proceeds to pay taxes before you get the rest.
Class B Common Stock financial
"Each share of Class B Common Stock is convertible at any time at the option of the Reporting Person..."
A class B common stock is one of multiple types of a company’s ordinary shares that carries specific rights—often different voting power or dividend priority—compared with other classes. For investors it matters because those differences affect how much influence you have over company decisions, the income you might receive, and how freely the shares trade; think of it like owning a car with different keys: some keys let you start the engine and open the trunk, others only unlock the door.
contingent right financial
"Each Performance-Based Restricted Stock Unit ("PSU") represents a contingent right to receive one share..."
change in control financial
"subject to acceleration upon a termination of employment or a change in control of the Issuer."
A "change in control" occurs when the ownership or management of a company shifts significantly, such as through a merger, acquisition, or sale of a large part of its assets. This change can impact how the company is run and may influence its future direction. For investors, it matters because it can affect the company's stability, strategy, and value, often signaling potential changes in investment risk or opportunity.
FAQ
What insider transactions did Duolingo (DUOL) CTO Severin Hacker report?
Severin Hacker reported the exercise of 60,000 performance-based restricted stock units into Class B Common Stock and a related tax-withholding disposition of 31,920 shares. These actions reflect equity compensation vesting rather than open-market buying or selling activity.
What are Duolingo (DUOL) performance-based restricted stock units (PSUs) reported in this filing?
Each Duolingo PSU represents a contingent right to receive one share of Class B Common Stock. Vesting requires both service-based conditions and performance-based stock price hurdles, with settled shares generally issued on the first anniversary of vesting or earlier upon certain employment or control changes.
How do the Duolingo (DUOL) PSUs for Severin Hacker vest over time?
The service-based condition vests 25% of the PSUs on each anniversary of Duolingo’s IPO, contingent on continuous service as CTO. The performance condition requires Class A stock to meet specified price hurdles over ten years before PSUs are fully earned and eventually settled.