Incentive stock options (ISOs) have been used for a long time to provide incentive for employees by granting them rights to company stock at a discounted price. Since ISOs are given out in the early stages of a company's life and before it goes public, they tend to be priced lower than their non-incentive counterparts.ISO grants are a type of equity compensation that allow executives and employees to obtain shares in the company at a discount. ISOs offer investors tax savings through deducting the difference between the market price and exercise price of an option from their taxes (if they are selling the stock). Both non-qualified stock options and incentive stock options may be granted to employees by companies, but there is one key difference: non-qualified stock options have to be held for at least one year before they can be sold while ISOs can be sold after 90 days.ISOs are a form of equity compensation or employee benefit in which rights to company shares may be granted at a discount to their fair market value. The discounted price is known as the exercise price and the difference between this price and the fair market value of the stock on the date that they are granted is known as an "option spread".Stock Options are one of the most popular ways companies reward their employees. ISOs, or Incentive Stock Options, are a type of stock option that offer tax advantages. This means employees are not taxed on the stock options until they exercise them and sell the shares.
