Appen CEO exits after share price slump

Once the ASX’s strongest performer, Appen’s shares are down 75 per cent in 12 months and its board has run out of patience.

Mark Brayan is leaving Appen. Picture: Jane Dempster

The chief executive of artificial intelligence specialist Appen Mark Brayan will exit the business he’s led for seven years, with the company’s board running out of patience after its shares slumped by 74 per cent in 12 months.

Appen’s board announced the leadership shake-up in a statement on Thursday, with Mr Brayan out the door in February 2023, to be replaced by former KPMG and Dell executive Armughan Ahmad.

In 2018 Appen was the ASX’s strongest performer, and its shares hit records highs in 2020, but have tumbled in the past 12 months amid a broader tech downturn and privacy changes to Apple’s iPhones. It’s also still bruised from a failed takeover in which its prospective suitor, Canadian telecoms outfit Telus, walked away without explanation from an offer that valued Appen at $1.2bn.

Mr Brayan told The Australian in an interview in August that he was committed to remaining in the chief executive role amid a wide-ranging review of the business.

“I’m excited about the market we’re in, and I’m excited about the journey,” Mr Brayan said four months ago. “I think every CEO’s role comes with comes with some headwinds. I’ve run the business for seven years now. And, you know, we are certainly facing some headwinds at the moment, but I’m reassured by the market we’re in, our capabilities and the team I’ve got around me to get through this. Companies have to work through these things, and we’re going to work through this.”

On Thursday Appen’s board announced that Mr Brayan would leave the business by February. The executive said he was proud to have led Appen for seven years.

“I’d like to thank Richard and Chris Vonwiller before him, the board and everyone at Appen for the opportunity to lead a great Australian company,” he said.

“It’s been a privilege and a pleasure, and I wish the company every success.”

His successor, Mr Ahmed, also a former Hewlett Packard executive, will join the company by January 30 and will be based out of the company’s North American offices.

“As we scale Appen to its next phase of growth, the board felt it was important to appoint a successor with deep technology expertise in international markets,” chairman Richard Freudenstein said in a statement.

“Armughan is an outstanding candidate and is ideally suited to be the next CEO of Appen.

“On behalf of the Appen Board, I want to thank Mark for his considerable contributions to Appen over his more than seven years as CEO. During Mark’s leadership, he has driven the business from around $60 million revenue in 2015 to more than $440 million revenue in 2021.”

Mr Ahmed said in a statement, “In my due diligence with industry partners and customers, I’ve found that Appen has the best technology in its category and delivers AI products and services to many of the world’s largest tech companies and Fortune 500 customers globally. Above all, Appen has built an incredible team that is committed to driving innovation while putting customers first.

“I am looking forward to leading this talented organisation to deliver continued innovation for our customers, value for our shareholders, and enhanced experience for our crowd contributors and employees.”

Appen’s business is made up of more than 1 million people who earn money by completing tasks like performing web searches and evaluating the quality of the responses, to more complex jobs like taking photos of all the electric vehicle charging stations across a city to help map their locations. It’s that data that has been valuable for the tech giants and powered Appen’s climb up the ASX 200, before it tumbled out in June. Big tech companies account for more than three-quarters of Appen’s revenue.

Appen shares last traded at $2.60, up 0.4 per cent.