It's the difference between the fair market value of the stock on the grant date and the purchase price determined as of the grant date (not the actual purchase price). (fairmark.com)
The intrinsic value of the stocks in which the portfolio invests may never be recognized by the broader market. (arielinvestments.com)
The difference between the fair market value of the stock on the exercise date and the option price is the taxable wage income. (ftb.ca.gov)