Briefing: Bytedance offers employees new share option plan

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市前的“绑定游戏”:字节跳动开启大范围期权换购 – 36Kr

What happened: Bytedance recently announced a new share option plan for its employees, media outlet 36Kr reported, citing several Bytedance employees. The plan gives employees the option to purchase Bytedance shares at $44 per share with their year-end bonuses for 2018. Employees that fall within the top five out of the eight possible ratings in Bytedance’s employee appraisal system are eligible for the plan. According to 36Kr’s estimates, this accounts for about 60% of the company’s workforce.

Why it’s important: By substituting a portion of employee bonuses with shares, Bytedance is preserving cash flow for other purposes. Having lost $1.2 billion in 2018 according to media reports, Bytedance has been pouring money into its products, many of which have not yet turned a profit. However, it seems that Bytedance won’t be giving too much ownership to employees, since the shares are capped by the amount of the bonus, and Bytedance often buys back shares from employees who leave the company.