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Physician Contract Glossary · Compensation

Deferred Compensation Agreement

A deferred compensation agreement promises you money later, often at retirement or after a vesting period, in exchange for staying.

Deferred compensation is pay you earn now but receive later, usually after a vesting schedule or at retirement. Practices use it to reward longevity and to keep partners from walking. The risk is simple: it is a promise, and a promise is only as good as the entity making it and the conditions attached to it. If you leave before vesting, or if the practice's finances turn, deferred money can evaporate.

WHAT TO WATCH FOR

Read the vesting schedule and the forfeiture conditions before you count on a dollar of it. Ask whether the deferred amount is funded and protected, or just a line in an agreement.

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You are about to sign something the senior people in your program signed without reading.

They had no guide either. You do. Start with the option that costs you nothing: see every practice that is actually out there before anyone hands you a contract.

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