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Incentive Stock Options

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Last discussed Aug 31, 2026

A type of employee stock option that provides tax advantages, allowing holders to potentially pay capital gains tax rather than ordinary income tax upon sale of the acquired shares.

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SG
Scott Galloway
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Used for: Building long-term wealth through tax-deferred equity growth at a startup or employer Praised: Tax-deferred growth, compounds faster than salary, lower capital gains tax ra... vs: Compared unfavorably to current income/salary, which loses 30-45% to taxes an...

"Equity is how you get wealthy. I have never really saved a lot of money with current income, and I am wealthy because of the equity I've owned in companies. ISOs and options are how, when you meet someone who's really wealthy and they work for a c..."

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