ByteDance, the parent company of the wildly popular short-video platform TikTok, is gearing up to significantly enhance compensation packages for its star employees. According to an internal company memo obtained by Business Insider, the tech giant is preparing to inject approximately 50% more funds globally into incentives like raises and bonuses in 2026 compared to the previous year. This substantial increase, however, is earmarked specifically for staff who surpass their performance review benchmarks.
Performance-Linked Payouts and a Cash-First Approach
The compensation overhaul, set to affect most departments within ByteDance, will directly tie rewards to annual review scores. Employees who secure an 'M' rating, indicating they consistently meet expectations, or higher will see their bonuses swell by 35% or more. Those achieving the top-tier 'F' rating, for exceeding expectations, are in line for even larger payouts.
In a strategic shift, a larger portion of these enhanced bonuses will be distributed in cash rather than stock options. This move is widely seen as an effort to attract and retain talent during a period of uncertainty. The uncertainty stems from ByteDance's plan to spin off part of TikTok's U.S. operations into a joint venture next year, which raises questions about the future liquidity of company equity. For employees who do receive equity, the vesting period will be shortened from four years to three, making the stocks accessible sooner.
Scrutiny on Reviews and Job Restructuring
Performance evaluations have always been a critical and closely watched process at TikTok. The company has previously encouraged managers to avoid grading staff at the midpoint to prevent ambiguity and conflict. Last year, ByteDance adjusted its review system to issue more low scores, thereby creating a sharper distinction between high and weak performers.
Parallel to the incentive changes, ByteDance is also planning a job restructuring initiative. Roles will be organized into 10 distinct levels with correspondingly higher performance standards. These internal changes coincide with the anticipated finalization of TikTok's U.S. spin-off deal, expected to close in January. The deal involves notable investors like Oracle, Silver Lake, and MGX. Importantly, key revenue-generating areas such as e-commerce, advertising, and marketing will remain under ByteDance's direct management.
A Talent Retention Strategy in Flux
The decision to offer more substantial raises and cash-heavy bonuses appears to be a calculated move to secure top talent during a transformative phase for the company. The planned U.S. spin-off creates internal flux, making employee retention a priority. As one ByteDance staffer highlighted to Business Insider, the emphasis on cash bonuses provides reassurance to employees who are wary of the unpredictable future value of company equity.
By front-loading compensation with liquid cash and rewarding only the highest achievers, ByteDance is sharpening its competitive edge in the fierce battle for tech talent, ensuring its key innovators and drivers remain motivated and onboard through its next chapter of growth and restructuring.
