If I understand you correctly, you are saying that the Strike or Option Price becomes higher than the Fair Market Value of the stock on the purchase date.
If that were true, would the employee still purchase the stock?
If the employee is committed to purchasing the stock at a higher price than Fair Market Value on day of purchase, the employee might sell the stock early as it would result in a short-term loss which could be used to offset a short-term gain and the Ordinary Income would be the discount on the lower Fair Market Value of the purchase date.
[Edited 02/07/2024 I 12:28pm PST]
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