ByteDance Initiates Stock Option Plan at $142 Per Share

TikTok owner ByteDance on April 15 communicated details regarding year-end merit pay with its employees, also offering them the option of exchanging their bonuses for ByteDance’s untraded stocks at $142 per share, local media outlet Jiemian News learned from sources familiar with the matter.

The company’s employees will receive either six-month or three-month year-end merit pay on the basis of departmental and individual evaluation. On-the-job employees received a new round of share option buyback notices, but they could only trade a certain proportion of them. Departing employees did not receive the notice.

The last round of share option buybacks at ByteDance was in October 2021, with a price tag of $132 per share, which also only involved on-the-job employees. Compared with the previous round, the purchase price this year increased by about 8%, which is considered satisfactory for many employees.

ByteDance initiated two share option buybacks in 2021, with prices of $132 per share in October and $126 per share in May, showing a steady rising trend.

Share option buybacks with high frequency and continuous increase of repurchase price are considered as compensation for disguised salary reductions last year. Since August 1 of last year, ByteDance cancelled its big/small week policy, whereby employees worked six days a week, every other week. Due to the cancellation of overtime pay on weekends, all employees in ByteDance have a general salary reduction of 17%. The rising share option buyback price may increase the cash income of employees.

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It takes four years for ByteDance’s options to be granted and fully attributed, with coverage rates of 15%, 25%, 25% and 35% respectively.