NEW YORK, NY (Reuters) – ByteDance will allow U.S. workers to receive their shares without having to wait for the company’s listing on the stock exchange, allowing them the opportunity to cash out.
This move is intended to appease restless employees that have been waiting impatiently for an initial public offer in order to benefit from the shares they were awarded as compensation.
ByteDance's value of more than $200 billion, making it the most valuable startup in the world, also indicates that Beijing is not in a hurry to take China's tech giants public.
Sources say that ByteDance now allows restricted shares to vest for U.S. workers as long as a sufficient amount of time has passed. Sources said that the company had previously required a "liquidity" event, such as a company sale or IPO, to trigger vesting. The employees can exchange their shares for cash once they have vested in ByteDance stock buyback program.
Sources claim that the employees were informed about the changes on a Tuesday. ByteDance's spokesperson confirmed the changes but declined to elaborate.
Our goal is to offer competitive rewards for employees. The spokesperson stated that "we announced an internal solution which will allow our U.S. based employees to participate in future buyback programs."
This move is applicable to all ByteDance employees in the United States, including approximately 7,000 TikTok workers.
Sources said that the new rules have a negative impact on some employees. Sources say that the vesting of shares is now considered an event taxable in the United States, even if the employee has not sold his shares. Sources said that the employees would have to pay for the tax themselves or sell shares to cover the expense.
According to sources, ByteDance launches its stock buyback program once a calendar year for all employees worldwide. These programs were previously not available to U.S. workers who did not have fully vested shares.
ByteDance is owned by 60% of its employees, 20% by the founders, and 40% by investors.
Employees in the U.S. have been subjected to increased political and regulatory scrutiny due to U.S. fears that ByteDance could be sharing TikTok users' data with Chinese authorities.
TikTok, a social media app used by over 150 million Americans, says it has "never shared and will never share U.S. users' data with the Chinese Government and taken substantial measures to ensure the privacy and security" of TikTok customers.
TikTok has been exempted from a federal ban that was contemplated, but it faces a Montana block, which is being challenged. The White House has prohibited TikTok from being used on devices issued by the government.