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Common Mistakes That Can Undermine Your Non-Qualified Deferred Compensation Plan

ARTICLE | July 21, 2026

Authored by Vasquez + Company

Non-qualified deferred compensation (NQDC) plans are a powerful tool for attracting and retaining top executives, but their complexity makes them easy to get wrong. From compliance failures under Internal Revenue Code Section 409A to poor investment choices and inadequate participant communications, even well-intentioned plans can quickly become a liability. Companies that neglect strategic planning and regular oversight risk triggering costly tax penalties, legal disputes, and long-term financial obligations that can strain competitiveness. Understanding what can go wrong is the first step toward protecting the value these plans are designed to deliver.

Read the full article here.

 

Our firm provides the information for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. This article is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.   

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