ByteDance, the Chinese parent company of TikTok, has allowed its U.S. employees to cash out their shares before the company goes public. The move is seen as an attempt to address employee concerns and provide them with an opportunity to profit from their awarded shares.
Previously, the vesting of shares for employees was tied to a future ‘liquidity event’ like an IPO or company sale. However, ByteDance has removed this condition and enabled the vesting of restricted shares for U.S. employees after a certain period of time. Once vested, employees can participate in ByteDance’s stock buyback programmes and exchange their shares for cash.
The move is also seen as a sign that ByteDance is not in a hurry to go public, given Beijing’s increased scrutiny of Chinese tech giants. The company is currently valued at over $200 billion, making it the world’s most valuable startup.
These employees have to pay taxes on vested shares, regardless of whether they sell them or not.
The move comes as U.S. employees at ByteDance face increased scrutiny due to concerns that TikTok may share user data with the Chinese government. TikTok though has denied these allegations, emphasising its commitment to user privacy.
Value our content... contribute towards our growth. Even a small contribution a month would be of great help for us.
Since eight years, we have been serving the industry through daily news and stories. Our content is free for all and we plan to keep it that way.
Support HRKatha. Pay Here (All it takes is a minute)
