Deferred Compensation

Deferred compensation is a financial arrangement where an employee earns income but receives it at a later date, typically after retirement or upon leaving the company. This can include bonuses, stock options, or retirement benefits. It allows employees to save for the future and can provide tax advantages, as taxes on the income are often deferred until it's paid out. Companies may use this strategy to attract and retain top talent, while employees benefit from potentially larger payouts and tax planning opportunities.