ByteDance Enhances Staff Stock Options as TikTok Faces Political Hurdles

Enhancing Employee Incentives in the Face of Uncertainty

ByteDance has promised to grant top-performing employees additional stock options from next year, as hopes rise that Donald Trump’s re-election as US president could ease the political pressure faced by TikTok in one of its most important markets. The Beijing-based social media giant, which hires roughly 110,000 workers globally, decided to give more stock options to those who attain a performance rating of M+ or above in the next review cycle, which begins in January.

Performance Ratings and Incentives

An M+ rating, which stands for above expectations, is the fourth-highest score on a scale of eight and is awarded only to a small portion of the staff. This marks the second time this year that ByteDance has adjusted its staff incentive policy to encourage better performance. In March, employees rated M (meet expectations) or higher were awarded extra payments of 5 to 15 percent of their original bonuses.

Previous Bonus Structure Changes

• Bonuses consist of a cash portion no bigger than three months’ salary.
• ByteDance has increased the upper limit of bonuses given to high performers.
• Employees can cash in their RSUs through internal share buy-back exercises.

A better outlook for TikTok has buoyed the valuation of ByteDance, which has risen to around US$300 billion in its new round of share buy-backs for institutional investors, up from US$268 billion last December but still lower than US$400 billion in 2021.

Political Climate and Its Effects

Trump has stated that voting for him would help save TikTok. However, it is unclear how he would protect the app from a law signed by President Joe Biden that would ban TikTok in US app stores unless sold by January 19, a day before Trump’s inauguration. This case is being reviewed in court.

ByteDance's Competitive Salaries

ByteDance is one of China’s highest-paying employers. The median annual pay for a staff member with five years’ experience in its research and development department is 950,000 yuan (US$131,000), compared to 900,000 yuan at Alibaba Group Holding and 676,000 yuan at Tencent Holdings.