Financial Glossary

Incentive stock options (ISO)

Definition

Incentive stock options (ISOs) are a type of employee stock option that provides tax benefits if certain conditions are met, allowing employees to purchase company stock at a set price.

Related Services

Compensation planning, tax consulting, and legal services help businesses structure ISO programs and ensure compliance with tax regulations.

Problem and Application

ISOs are beneficial for both employees and employers but can be complex to manage, requiring careful planning to maximize their tax advantages.

Conclusion

ISOs offer employees an attractive way to benefit from company growth, but both employees and employers need to understand the tax implications and structure the options properly.