Deferred Compensation vs Executive Bonus: Choosing the Right Retention Structure
Compare deferred compensation and Section 162 executive bonus plans for retention, portability, control, tax timing, and admin burden.
Core Difference
- Deferred compensation keeps heavier employer control but greater complexity.
- Executive bonus is simpler and more portable for the executive.
When Deferred Comp Wins
- Long vesting and tighter retention handcuffs are the primary objective.
When Executive Bonus Wins
- Speed, simplicity, portability, and lower admin friction matter more.
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