An employee stock option (ESO) provides employees the opportunity to purchase stock in the company they work for, typically at a price below market value. The two main categories for tax purposes are statutory (incentive stock options) and nonstatutory options.
An Incentive Stock Option (ISO) is an equity-type compensation plan where qualifying stock options are free of tax at the date of grant and the date of exercise but are taxed when sold.
A profit-sharing scheme is a program that provides employees with a share in the profits of the company they work for, often by means of share ownership.
A qualifying stock option is a privilege granted by a corporation to its employees, allowing them to purchase the company's capital stock at a special price under specific conditions outlined in the Internal Revenue Code.
Shares in a company typically granted to select employees under specified conditions, such as tenure or performance targets, often employed as an alternative to share option schemes.
A share option is a benefit often offered to employees that provides them the opportunity to purchase company shares at a favorable fixed price or discounted market rate. This guide explores the definition, examples, FAQs, related terms, and additional resources.
