Deferred compensation is a tax-advantaged plan under which an employee postpones a portion of their salary in exchange for the employer's promise to pay this salary in the future, usually to achieve tax benefits and retirement planning.
A Phantom Stock Plan is a type of deferred-compensation plan that uses the employer's stock as a basis for determining the value of the compensation payment. It provides employees with the benefits of stock ownership without actually awarding them any company stock.
A profit-sharing plan is an agreement between a corporation and its employees which allows employees to share in the company's profits. Contributions are made annually by the company to an account for each employee, accumulating tax deferred until retirement or departure. Employees may be able to borrow against these funds for major expenditures.
An irrevocable trust used to fund deferred compensation benefits for key employees in the absence of a qualified plan or trust, ensuring some financial security against company risks.
