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May 31, 2021

TikTok Salary Negotiation

TikTok blasted into prominence in 2020 and has spent the past year at the top of the global app download charts. Unsurprisingly, the company has also significantly ramped up hiring to ensure it is well positioned to take advantage of this growth opportunity. While recruiting pushes typically result in top-tier compensation packages for tech employees willing to take a risk, ByteDance has proven to be relatively conservative with its offers of late. This guide aims to equip you with the key pieces of information you need to maximize your compensation when negotiating with TikTok.

Negotiate Your Offer

Table of Contents

TikTok Offer Compensation Components

Before starting any negotiation, it is critical you fully understand the different compensation components offered. A typical job offer for a tech role at TikTok (e.g. Software Engineer) should contain the following monetary components:

This is what a TikTok 2-2 offer looks like over a 4-year period:

Before diving into the components, I want to clarify leveling as this is often a point of confusion:

Base Salary

TikTok's base salary is one of the highest in the industry. They typically pay slightly above Google and Facebook for comparable roles (e.g. L4/E4/2-1). Despite base salary being one of the hardest components to negotiate, we've seen TikTok increase base salary fairly significantly on a number of offers we've helped negotiate. Like most companies in the US, TikTok pays out base salary twice a month, and there are no real "tricks" to speak of with this component of compensation.

Equity - Restricted Stock Units (RSUs)

There are many interesting nuances with TikTok's equity that are particularly relevant if you are evaluating multiple competing offers.

To start, while ByteDance is still a private company, they have chosen to issue employees RSUs not stock options. This also true for a few other late-stage private companies (e.g., Stripe and Waymo). The advantage is that you do not need to pay for these shares as there is no strike price. Instead, ByteDance will give you an equity grant, then divide that by their current valuation ($190 per share as of April 2021) to arrive at the number of shares you will receive.

Despite TikTok's equity being labeled "RSUs", they are not directly comparable to RSUs you would get at a company like Google. The primary difference is liquidity. Not only does TikTok have a slower vesting schedule (more on that later), but when you receive your shares, they cannot easily be sold since they are not publicly traded. TikTok has rolled out share buyback programs in the past (read more), but the tradeoff is that you get this liquidity at a significant price discount. For example, in May 2021, ByteDance began offering share buybacks of $126 for current employees and $100 for past employees, despite the company issuing RSUs at $190 per share.

Another drawback is TikTok's vesting schedule, which is unfortunately back weighted. This means if you are granted $600K RSUs you will receive:

For those you who like to dig into the weeds, I've included an anonymized quote from a TikTok Offer Letter we negotiated recently.

"Restricted Share Units. Subject to (i) the approval of the Board of Directors of Bytedance Ltd., the parent of the Company, and (ii) your execution of a restricted share unit award agreement (the "RSU Agreement”), you will be granted an award of 2750 restricted share units (“RSUs") of Bytedance Ltd. under the Bytedance Ltd. 2012 Stock Incentive Plan (the "Plan"), with each RSU representing the right to receive one Class A ordinary share of Bytedance Ltd., subject to the restrictions and on the terms set forth in the Plan and the RSU Agreement. The RSUs will vest upon satisfaction of both (i) a time-based vesting condition and (ii) a performance-based vesting condition, in each case, on or before seven years from the date of grant (with vesting to occur on the first date on which both requirements are satisfied). The time-based vesting requirement will be satisfied upon the following schedule: 15% of the RSUs on the first anniversary of the Start Date; 25% of the RSUs on the second anniversary of the Start Date; 25% of the RSUs on the third anniversary of the Start Date; and 35% of the RSUs on the fourth anniversary of the Start Date, subject to your continued employment with the Company on each applicable vesting date. The performance-based vesting requirement will be satisfied upon the earlier to occur of a "Liquidation Event or "WO" (each as defined in the RSU Agreement). The terms, conditions and limitations of the RSUs, and your rights and obligations with respect to the RSUs, will be governed by the Plan and the RSU Agreement Notwithstanding anything in this letter to the contrary, the terms of Bytedance Ltd.'s equity program, including the Plan, may be changed at any time in the discretion of the Board of Directors of Bytedance Ltd.

Signing Bonus

At TikTok, signing bounses are often referred to as a hiring bonus. It's normal for recruiters to leave these out of the initial offer, especially for more junior candidates or non-technical roles. However, we have seen that Bytedance has quite a bit of flexibility with this component, and in certain cases, clients have received +$75K on top of their initial signing bonus. It is important to note that TikTok does not prorate this and is known for clawing back hiring bonuses if you leave before the 1-year mark. At one point in 2020, TikTok was requiring a 2-year Hiring Bonus Repayment Agreement, but that is less common now. It is worth reading the Hiring Bonus Repayment Agreement section of your contract closely to make sure you fully understand what you are committing to.

Performance Bonus (if applicable)

TikTok is known for having a pay-for-performance culture, and it lists one of the highest target performance bonuses in tech at 25%. This is strangely consistent across levels, unlike most FAANG companies that increase your target % as your level increases.

There is a substantial amount of controversy around whether this is, in fact, an "accurate" target number. At companies like Google, nearly 90% of engineers receive their target bonus, whereas based on anecdotal accounts, we expect the number to be much lower at TikTok.

Stock Refreshers

Unfortunately, TikTok does not offer stock refreshers at this time. This should be a major point of consideration if you are comparing equivalent offers at companies like Apple and Facebook, which are known for offering large refresher packages. As a point of comparison, an Apple ICT4 engineer (roughly TikTok 2-2) could receive $170K per year in stock refreshers if they are in the top performance bracket. TikTok may introduce refreshers in the future, but there is currently no credible information on timelines.

TikTok Negotiation Process

Before getting into this section, there are some caveats to be aware of. TikTok has one of the most volatile recruiting and negotiation processes we've seen out of any of the major tech companies. It is known to have a higher rate of ghosting candidates (though we haven't had issues with our clients, fortunately). During particularly intense periods (e.g. the Trump ban), many aspects of this process changed.

If you have not yet received an offer from TikTok there are a few mistakes to avoid:

  1. Do not share your current compensation. In many states (e.g. California), it is illegal for companies to ask this, so you are certainly within your rights to say, "I do not feel comfortable sharing that information". Despite it being illegal, TikTok is one of the few companies that regularly asks for this information.
  2. Do not share your compensation expectations. TikTok recruiters will sometimes claim they need this to move forward. However, it is in your best interest to deflect this question until they have extended an offer. One possible response is, "right now, I'm focused on the interview process and don't have a number in mind, but I'm confident we will be able to get to a number that works for both of us."

Here is the standard process for candidates receiving an offer from TikTok:

  1. After the final round of interviews, the hiring committee responsible for your decision will meet. TikTok has an internal scoring system that influences how willing they are to negotiate, and that is set during this meeting.
  2. If your final round interviews are successful, recruiters will often tell you that you are receiving an offer within one week. In some cases (especially for senior candidates), they will tell you that you are being offered a position but will refuse to give you the initial offer until you share compensation expectations. It’s important to be prepared for this in advance.
  3. When you receive the initial offer, make sure to document all the information and clarify any points of confusion with your recruiter. You will usually be able to push for more time to consider the offer. TikTok isn't known for exploding offers (in most situations), and this will give you time to prepare your counter offer.
  4. You should then set up a second call with your recruiter to share your counter offer numbers. The recruiter will likely push back, and at Moonchaser, we build a tree diagram unique to your situation with the most likely objections and the optimal responses to those objections. The goal of this call is to get the recruiter to take your counter offer number back to the hiring committee because the recruiter will likely not have the authority to approve these new numbers.
  5. It typically takes less than 3 days to hear back from the recruiter with the “final offer”, but it is not unusual to have this stretch out past the 1-week mark.

TikTok-Specific Negotiation Advice

There are many unusual things we've encountered in past negotiations with TikTok. I'll list some of these below in addition to best practices to ensure you are well prepared for your upcoming negotiation.

Refusing to disclose levels: for a number of candidates, TikTok has been very unwilling to share leveling details. Sometimes they try to deflect this by providing a role title, and in other cases, they just dodge the question entirely. This makes negotiations much tougher to navigate, particularly in the case where you need to make an initial offer. Make sure you have a deep understanding of compensation bands for your target level and one-level lower to handle this ambiguity.

Recruiters changing numbers: we've seen several cases where TikTok recruiters have given one offer on an initial call and then attempted to lower that offer on subsequent calls. This typically impacts one component of compensation (e.g initially said $75K signing bonus but on the next call they say it is $25K). It's crucial you 1) write down every piece of information they share and 2) try to confirm numbers in writing with your recruiter after each call. In these situations, you can usually push back and even negotiate above the initial number – you just need to be prepared for this tactic. A similar trick is where the recruiter “miscalculates” the total value. For example, they will tell you the offer is over $500K per year, but the offer comes out to $475K per year when you actually calculate it.

Interview scoring system: when the hiring committee decides whether or not to extend an offer, they also bucket you into a group (e.g. base-line offer, fight for this candidate, do everything we can to win this candidate). Understanding where you fall in this range can help you better position your counter offer. This is why it's important to spend time on your first recruiter call asking questions about how well you did in the interview. Sometimes recruiters aren't willing to share, but it's still best practice to ask the question as many will share this info.

Adjusting compensation between components: this is actually fairly rare for a company of this size, but we have seen it at TikTok. For example, when you push for more RSUs, they will sometimes come back with higher RSUs and a lower base salary. To avoid this, you should also anchor them on a yearly total comp figure. In some scenarios, the decrease is small enough it can be ignored. In one recent negotiation, the recruiter came back with higher Base Salary and a $1000 decrease in RSUs. This was roughly a 0.1% change on the RSU offer, so I’m not exactly sure what they were optimizing for here…

TikTok does not push for offers in writing: unlike Google, TikTok does not usually require you to provide cross offers in writing. This can be useful because many companies avoid putting their offers in writing to prevent you from using them as leverage in other negotiations. However, for TikTok, you can continue to use those verbal offers as points of leverage.

Few exploding offers: most clients we support in TikTok negotiations have not received offers with short acceptance timelines. In the few cases where it has happened, we have been able to secure extensions using our standard playbook (start with recruiter then go to hiring manager, open-ended then progress to specific reasons). Sometimes recruiters will ask for verbal confirmation by the end of the week that if they secure your requested increase, you will accept the offer. If you are happy with your counter offer, it's fine to agree to this.

Negotiate Your Offer