Deferred compensation interest rate

When the deferred amount paid out is a fixed amount (like with Jarvis), the interest rate used to determine the cap hit is set using the interest rate the day it is signed. The cap hit is set at that point and will not change based on changes to market interest rates.

A deferred compensation contract can include a principal amount deferred plus interest (fixed or variable). In that case, the cap hit calculation uses just the principal amount deferred, so again, there is no adjustment to the cap hit based on interest rate changes.