TikTok owner ByteDance allows employees to cash in stock options earlier under new payroll policy
- Under the new rule, staff will receive 20 per cent of their total stock awards after their first year of service, up from 15 per cent previously
- Annual bonuses have been standardised to three months worth of salary, all granted in cash, with additional sums to be given on merit
ByteDance, owner of global short video hit TikTok and its Chinese sibling Douyin, has adjusted its payroll policy to allow employees to sell their stock options faster, as plans for an initial public offering (IPO) remain in limbo.
Under the new rule, applicable to ByteDance’s 110,000 employees worldwide, workers will receive 20 per cent of their total stock awards after their first year of service, up from 15 per cent previously, according to two people briefed on the matter on Thursday.
Thereafter, stock grants will be vested on a quarterly basis rather than annually, as was previously the case. Workers will get 25 per cent of their equity grants after the second year, and again in the third year, with all remaining shares to be vested after the fourth year.
ByteDance did not immediately respond to a request for comment.
The four-year time-based vesting schedule is commonly adopted by businesses to encourage staff to stay longer. As ByteDance remains a private firm, the only way for staff to cash in their stock options is to sell to their employer.
The Beijing-based company’s share buy-back programme has taken place twice a year since 2017. The most recent one, in November, priced the stock at US$160 per share.