Incentive Stock Options (ISOs)

Incentive Stock Options (ISOs) are a type of employee benefit that gives workers the right to buy company shares at a fixed price, usually lower than the market value, after a certain period. They offer potential tax advantages, as profits can be taxed at lower capital gains rates if specific conditions are met. ISOs are designed to encourage employees to invest in the company and align their interests with shareholders. If the company's stock rises above the option price, employees can realize significant financial gains upon exercising their options.