GlossarySummary Compensation Table columns
Nonqualified deferred compensation
Also called NQDC, deferred compensation.
Pay an executive elects or is required to receive in a later year, outside a qualified plan. Above-market earnings can appear in the SCT pension/deferred column and therefore in Total as filed.
What it is
Nonqualified deferred compensation (NQDC) is a promise to pay salary, bonus, or other amounts later, outside a tax-qualified 401(k). Executives elect to defer, or the company credits supplemental amounts. The proxy has a separate NQDC table (contributions, earnings, withdrawals, balance).
In the SCT, only above-market or preferential earnings on NQDC go into the pension/deferred column. Ordinary market-like earnings on deferred balances generally do not. Company contributions may appear in All Other Compensation instead.
Why companies use it
Deferral lets executives postpone tax and accumulate on a pre-tax basis, subject to Section 409A. Supplemental plans restore benefits capped in qualified plans.
Companies use NQDC as a retention device: unvested company credits may be forfeited on early exit.
Pros
- Tax timing flexibility for the executive.
- Can replace a pension for companies that froze DB plans.
- The dedicated proxy table is more informative than the SCT sliver.
Cons
- Balances are general unsecured claims; they can be lost in bankruptcy.
- 409A mistakes are expensive.
- SCT readers who never open the NQDC table miss the stockpile.
Examples
Above-market earnings
If a deferral account is credited 8% when a defined market rate is 4%, the excess can appear in the SCT pension/deferred column and thus in Total as filed—even if CompensationBase does not show that column.
Company match in Other
A 10% company credit on deferred bonus may be reported in All Other Compensation, not as salary. Mix bars will show it as Other.
On CompensationBase
Above-market NQDC earnings can appear in the pension/deferred SCT column. Because that column is not shown separately, those earnings may be in the total only.
Related terms
- Change in pension value and nonqualified deferred compensation earnings
An SCT column CompensationBase does not parse as its own bar. The amount can still sit inside SCT Total as filed, so component bars may not add to the headline total.
- All other compensation
The SCT catch-all column for perquisites, certain pension amounts, and items not put in salary, bonus, or equity. Alternative-asset managers often report carried interest and partnership distributions here.
- Total compensation
The headline pay figure CompensationBase ranks and displays: the Summary Compensation Table Total column as filed, not a recomputed sum of the component bars.