{"ok":true,"canonical_url":"https://dealroom.so/glossary/deferred-compensation","api_url":"https://dealroom.so/api/public/glossary/deferred-compensation","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"deferred-compensation","term":"Deferred compensation","group":"Reading the business","definition":"Money earned by an employee or owner but paid out later, often to reduce current tax liability. As a buyer, you need to understand if these liabilities will transfer with the business.","what_it_means":"For a seller, deferred compensation may be an add-back if it's discretionary and won't continue under new ownership. Ensure the deal structure accounts for any outstanding obligations, otherwise, you could inherit a significant future payout liability.","url":"https://dealroom.so/glossary/deferred-compensation","official_sources":[],"related":[{"slug":"add-backs","term":"Add-backs","url":"https://dealroom.so/glossary/add-backs"},{"slug":"sde","term":"SDE","url":"https://dealroom.so/glossary/sde"},{"slug":"ebitda","term":"EBITDA","url":"https://dealroom.so/glossary/ebitda"},{"slug":"liability","term":"Liability","url":"https://dealroom.so/glossary/liability"}],"related_questions":[{"question":"Can the seller receive any form of compensation from the acquired business during the standby period of their seller note?","url":"https://dealroom.so/sba-7a/questions/can-the-seller-receive-any-form-of-compensation-from-the-acquired-business-during-the-stan"},{"question":"What if the business I'm buying has existing deferred revenue or unearned income?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-m-buying-has-existing-deferred-revenue-or-unearned-income"},{"question":"Can a partial equity injection come from a deferred management bonus from my current employer?","url":"https://dealroom.so/sba-7a/questions/can-a-partial-equity-injection-come-from-a-deferred-management-bonus-from-my-current-emplo"},{"question":"How does a lender underwrite a business acquisition with existing deferred revenue or unearned income?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-underwrite-a-business-acquisition-with-existing-deferred-revenue-or-unea"},{"question":"How does a lender assess deferred maintenance or capital expenditure needs of an acquired business?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-assess-deferred-maintenance-or-capital-expenditure-needs-of-an-acquired-"},{"question":"Can a seller note with deferred payments but no interest count as full standby for equity injection?","url":"https://dealroom.so/for-lenders/questions/can-a-seller-note-with-deferred-payments-but-no-interest-count-as-full-standby-for-equity-"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Deferred compensation","url":"https://dealroom.so/glossary/deferred-compensation","source_type":"DealRoom Data"}}