"I assume SE tax will apply since it was deferred comp."

From being an employee and FICA should have previously been withheld on it.

"Considering putting it as a 1099-NEC, box 1, transaction."

But you would not enter a 1099-NEC unless the taxpayer is given a 1099-NEC. You have a 1099-Misc to use, already.

This type of payout should be reported on W2, but perhaps this is payout from a trustee.