Companies sometimes offer a Nonqualified Deferred Compensation Plan.
These plans are designed to be discriminatory as they are established just for a couple of key executives. As such, there is no current company tax deduction until the benefit is paid to the executive, as w-2 income. But, the question of taxability is the timing.
Vesting is not the same as in a 401(k) plan. It is one leg of the availability of benefits, but usually there is a second distribution trigger leg. That is, vesting becomes “real” and a participant has no risk of forfeiture. Regardless of whether the benefit is paid, meeting all of the conditions for payment and the forfeiture is eliminated triggers the company deduction and the participant tax. Until that time, the benefits are part of the company assets.