ByteDance, the parent of short-video platform TikTok, is planning to lower the price of its stock options to $155 per share to enhance the benefit space of employees and allow them to share in the growth value of the company, an internal email of ByteDance obtained by The Paper on August 31 showed.
At the same time, ByteDance will carry out a special stock option granting programme. Employees who were given shares at a higher price than $155 will be included in the special plan. The number of employees in this plan is around 30,000.
ByteDance’s last round of stock option granting programme was at $195 per share. Some analysts said that lowering the option grant price will help the repurchase mechanism to continue, and benefit employees and candidates, which means that they can purchase more shares at lower prices in the future.
It takes four years for ByteDance’s options to be granted and fully attributed, with coverage rates of 15%, 25%, 25% and 35% respectively.
Since 2017, ByteDance has run a share buyback program twice a year to motivate employees, and the repurchase price has been steadily rising. The last two buybacks took place in October 2021 and April 2022.
In April this year, ByteDance repurchased stock options at a price of $142. On-the-job employees who received the notice at that time could only trade a certain proportion of options but not all of them, and employees who had left the company did not receive the email. The company’s option repurchase in October 2021 was at a price tag of $132 per share, which also only involved on-the-job employees.