The rising price of the buyback is reportedly to compensate employees’ income losses
Chinese TikTok owner ByteDance initiated on April 15 a share buyback plan at USD 142 per share for employees, up 8% over the last round, according to a company insider.
The firm allowed current employees to trade a certain amount of their holdings as an annual bonus. Companies often opt for employee stock option, a grant to an employee giving the right to buy a certain number of shares in the company's stock for a set price.
Former employees did not receive the notice.
The price for current employees during an earlier buyback last October was USD 132 per share, the source said. Another buyback in May 2021 was set at USD 126 apiece.
ByteDance did not respond to our request for comment.
The rise in frequency and price of its buyback plans was interpreted as compensation for a decrease in salary, as the cancellation of weekend overtime pay cut employees’ income by 17% on average last year.
ByteDance grants employees a certain proportion of stock options in four years, respectively 15%, 25%, 25%, and 35%.
Most internet companies share a similar distribution pattern with nuance in proportion. Tencent (0700: HK) grants one-third of stocks to employees per year for three years. Alibaba (BABA: NYSE) and Meituan (3690: HK) give 50% in the second year and 25% each for another two years. Baidu (BIDU: Nasdaq) grants 25% each year within four years.