The deferred management incentive compensation plan is an agreement through which the highly compensated employees and the senior management are able to defer payment for the future. This is for both public and private companies. This is a process through which the employees can be retained in the company for a long time. This is also a great way to defer taxes and have income for after retirement. This is especially seen in family companies where this acts as a security. This helps in minimizing risks of employees leaving the company for competitive organizations.
It is important that for such compensation plan is in accordance with the employee retirement income security act of the state. It is essential that the terms and conditions are properly stated in the plan. The employees must be aware of how much of the income will be deferred and when the income will be released after retirement.
Deferred Management Incentive Compensation Plan
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