Incentive stock options (ISOs) are a type of employee stock option that allows workers to purchase company stock at a fixed price, typically lower than the market value, without incurring immediate tax liability. They are designed to motivate employees by aligning their interests with those of shareholders and rewarding them for the company’s performance. Unlike non-qualified stock options, ISOs offer favorable tax treatment if certain conditions are met, making them an attractive form of compensation for both employees and employers.
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