Cash buyout of Life Ins included as compensation?

[kmhaab]

Employer did a buyout of supplemental life insurance policies for a handful of executives. Policies were surrendered and executives paid the cash value. Question is whether this buyout amount is included as compensation for 401(k) purposes.

The plan defines compensation as total cash compensation, including overtime pay, commissions and bonuses but excluding fringe benefits, welfare benefits, deferred compensation, reimbursement and expense allowances.  

Would the buyout amount be considered a fringe benefit, even though it was paid in cash? Any thoughts are appreciated.