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.
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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