Strategic Deferred Compensation
A Strategic Deferred Compensation Plan is a performance based retirement program. Individual nonqualified retirement accounts are created for the plan participants (typically executives and senior managers). The company annually establishes performance targets which, if achieved, will lead to contributions to the participants' accounts. Better results lead to higher contributions. Once the contribution has been made the employees are given the ability to self-direct their account allocation among a variety of investment options. The investments are handled in the same way as with a standard deferred compensation plan and are subject to the same limitations and risks. Plan accounts are also typically subject to vesting schedules.