Forms of compensation like restricted stock units and performance shares are often more straightforward than stock options, with taxes that can be better aligned with gains.
Employee stock options allow employees to exercise options at a predetermined price, potentially yielding profits if the market price exceeds the strike price.
The key difference between incentive stock options and nonqualified stock options is the tax treatment, significantly affecting how strategies for utilizing these options are developed.
Nonqualified stock options are taxed at the investor's ordinary income tax rate upon exercise, while gains from incentive stock options can have different tax implications.
#stock-options #executive-compensation #tax-implications #incentive-stock-options #employee-compensation
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