What Is Deferred Compensation?Deferred compensation is a portion of an employee's compensation that is set aside to be paid at a later date. In most cases, taxes on this income are deferred until it is paid out. Forms of deferred compensation include retirement plans, pension plans, and stock-option plans.KEY TAKEAWAYSDeferred compensation plans are an incentive that employers use to hold onto key employees.Deferred compensation can be structured as either qualified or non-qualified.The ...