"Nonqualified" deferred compensation is simply the deferred payment of earned compensation under a plan or arrangement that is not eligible for the tax benefits accorded "qualified" pension and profit-sharing plans. For example, it is never possible in a nonqualified deferred compensation plan for the employer to get a deduction currently without current taxation of the employee. However, unlike qualified plans, nonqualified plans generally may be "discriminatory" in that employees can be covered on a selective basis.
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