Exercising stock options is a unique case. If I as an employer give you $10m worth of stock (through grants or options), you have something akin to an "income" of $10m on the receipt of that stock. (For the record I disagree with taxing stock grants/options until they're realized and the proceeds can be used to pay the accompanying tax burden.)

If I give you $1 worth of stock and it appreciates to $10m, you have capital gains that will be taxed when you realize those gains.