ByteDance adjusts option incentive policy and changes to quarterly vesting

According to news from this site on January 18, ByteDance issued an all-staff email today, updating its performance and incentive policies.

The summary of this site is as follows:

• Employee options can vest faster.

Starting from 2024, the pace of option vesting in the total salary package will accelerate. Except for the first year of employment, the adjustment is from "annual vesting" to "quarterly vesting". At the same time, the four-year vesting ratio has changed from "15%-25%-25%-35%" to "20%-25%-25%-30%" , and the vesting ratio has increased in the first year. Options for salary increase and additional issuance after joining the company will vest directly on a quarterly basis.

• The year-end incentive method has been changed, and high-performing employees can receive a larger total amount of incentives, which are issued in the form of options.

Starting from January 2025, The annual incentive meeting for ByteDance employees will consist of two parts: "Full-year Award" and "Performance Option". The maximum annual award is 3 months' monthly salary, and employees with outstanding performance will receive performance options.

• Performance options will double amplify the base number and the number of shares.

From a base point of view, performance options are calculated based on the total monthly salary package instead of the monthly salary, which includes not only the monthly salary but also the options in the total salary package. Judging from the number of shares, performance options will issue an additional proportion (about 10%) based on the current price.

• After the option vests, you can participate in the repurchase in full.

Performance options obtained by employees will vest at a uniform monthly rate, up to 2 years. After the option vests, you can fully participate in the repurchase. According to media reports, ByteDance repurchases options from employees twice a year, the last time in November 2023, at a repurchase price of $160 per share.

In conjunction with this adjustment, ByteDance has also adjusted its salary structure, adjusting the original salary plan with a year-end bonus of more than 3 months to 3 months. For these employees, the general contract remains unchanged and the monthly salary increases.

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