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deferred compensation is an arrangement in which a portion of an employees pay is paid out at a date later than theyve actually earned it the way banks used deferred compensation is quite varied theres a number of different type of arrangements the voluntary deferred compensation plan is one of them in which the employee actually defers a portion of their compensation at their election to be paid out at a date of their choosing an involuntary plan is the one in which the company or the bank requires the employee to defer a portion of their compensation to be paid at a later date an example of that would be an annual incentive payment where a portion of that incentive payment is required to be deferred to a later date by the company then you have contributory plans contributory plan is one in which the bank actually contributes money to the deferred plan in the name of the executive or the employee to be paid at a later date these type of arrangements are becoming much more popular b
