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Deferred Compensation

   Also found in: Wikipedia 0.01 sec.
Deferred compensation
An amount that has been earned but is not actually paid until a later date, typically through a payment plan, pension, or stock option plan.

Deferred Compensation
Money or other compensation that has been earned but not yet received by the earner. Deferred compensation is not taxed until it is actually received, and is usually taxed at a lower rate when it is received (depending on one's income later in life). The most common form of deferred compensation is a retirement plan such as an IRA or 401(k), but stock options and other pensions also qualify.

deferred compensation
Compensation that is being earned but not received, a process that defers the taxes on the compensation until it is actually received at a later date. Deferred compensation includes various plans, some being pensions, profit-sharing, and stock options.

Deferred Compensation
Compensation that will be taxed when received or upon the removal of certain restrictions on receipt and not when earned. For example, contributions by an employer to a qualified pension or profit-sharing plan on behalf of an employee are considered deferred compensation. Such contributions will not be taxed to the employee until the funds are made available or distributed to the employee, usually upon retirement or separation from service.


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One for an employer seeking ways to benefit only selected key employees may be the adoption of a non-qualified deferred compensation plan.
Hidden in the October 2008 bail-out bill was a new draconian rule that applies to traditional deferred compensation arrangements of partnerships and foreign corporations, and some performance and management fee arrangements of private equity and hedge funds.
First, members of Congress wanted to eliminate "haircut" distributions under corporate deferred compensation plans.
 
 
 
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