TikTok and its parent company ByteDance are overhauling their compensation framework to significantly reward high-performing employees, as the global tech industry intensifies competition for skilled talent, particularly in artificial intelligence and advanced engineering roles.
According to an internal memo sent to staff and reviewed by Business Insider, ByteDance plans to increase global spending on incentives such as bonuses and pay raises by around 50% in its 2026 performance cycle compared with the previous year. The move is aimed at retaining top talent and attracting new hires at a time when leading tech firms are aggressively differentiating rewards for elite performers.
The enhanced compensation will not be distributed evenly across the workforce. Instead, the additional spending is targeted at employees who exceed specific performance thresholds in annual reviews. ByteDance emphasised that the strategy is designed to clearly separate high performers from the rest of the organisation, reinforcing a culture of merit-based rewards.
As part of the changes, ByteDance will invest about 35% more in bonuses for employees who score “M” (meets expectations) or higher, with even larger payouts reserved for those rated “E” (exceeds expectations). A greater share of bonuses will be paid in cash rather than equity, a shift that may appeal to employees concerned about the liquidity of stock-based compensation, especially as TikTok prepares to spin off part of its US business into a new joint venture.
The company is also shortening equity vesting periods from four years to three, giving employees faster access to the value of their stock awards. In parallel, ByteDance plans to reorganise roles into 10 job levels and raise performance standards across teams, underscoring its push for sharper internal differentiation.
The pay revamp comes during a period of transition for TikTok. The company has informed US employees that parts of its operations will be spun off into a joint venture involving investors such as Oracle, Silver Lake, and MGX. While key functions like advertising, e-commerce, and marketing will remain under ByteDance’s management, the restructuring has created uncertainty for staff.
By boosting cash bonuses and accelerating equity vesting, ByteDance appears to be proactively shoring up morale and loyalty during this restructuring phase. The strategy mirrors broader industry trends, with companies like Meta, Amazon, and Google also adjusting pay structures to reward top-tier talent amid fierce competition and soaring compensation expectations.
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