An Employee Stock Option (ESO) is a benefit that companies offer to their employees, allowing them to purchase shares of the company's stock at a predetermined price, known as the exercise price. This option typically becomes available after a certain period of employment, encouraging employees to stay with the company and contribute to its success. When employees exercise their options, they can buy the stock at the exercise price, even if the market price is higher. This can lead to financial gains if the company's value increases. ESOs align the interests of employees with those of the company, promoting a sense of ownership and investment in its future.