Coaching contracts these days have long ceased to floor me, so Jim Harbaugh getting a sweetened deal that promises to take his total compensation to $9 million in basic pay for his current contract year is just another brick in the wall of schools being full of crap when they plead poverty…
… but if a guy who has yet to win a Big Ten title is worth that kind of jack, what’s Nick Saban worth? Something tells me we’ll find out sooner or later. Right, Mr. Sexton?
Get The Picture 
Over funded life insurance. Interesting.
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I get a nice smile at the mental picture of Corch slamming something and cussing up a storm.
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So is Michigan going to fire him and then have him whacked?
The life insurance thing seems weird.
Also what are the odds that he is coaching Michigan in 2020? Seems pretty slim.
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The life insurance approach is actually very creative from a business standpoint and sometimes used to fund buy-sell arrangements for private companies. The type of policy they’re using is much more of an investment/mutual fund wrapped around some life insurance for tax purposes. U of M can deduct premiums paid as a business expense, Harbaugh gets the full $2M – $4M treated as a loan, so no taxes paid on it as income I believe (maybe CPA Dawg can confirm) and the death benefit will be tax exempt to whoever is the beneficiary when he dies not to mention U of M gets their money back.
Win-win for Harbaugh and U of M….except the players, students and alumni don’t benefit financially in any way. With the “labor costs” under control and money flowing into college football skyrocketing, the HC salaries will soon meet or exceed NFL salaries, so long as the HC is okay dealing with the recruiting and pampering of 20 year olds.
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You are mostly correct. It’s called “Split Dollar” life insurance. Since UM holds (shares) an interest in the policy cash values and death benefit equal to premiums paid, the premiums are not tax deductible. The premiums are treated as a loan to Mr. Harbaugh and he must recognize income for that…a special calculation for these types of plans. Very common form of executive compensation. At retirement/terminiation, UM will likely release the assignment of policy values, Mr. Harbaugh pays back the loan (using policy cash values) and then walks away with the residual cash value and death benefit. Net result is UM is reimbursed for the premiums and Mr. Harbaugh has a lot of tax-deferred cash accumulated in a life insurance policy for his own personal planning.
If you fell asleep reading the above, my apologies!
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thanks for that.
Another interesting example of how rich people income aint like regular folk income.
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AusDawg, thank you for the explanation and very insightful.
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As for Saban and Bama, I wonder what Dabo or Smart (if he is successful) will be worth to the Tide to keep things rolling when Saban retires?
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Should your players/ fan base/school president enjoy your company why entertain the idea of jumping into the fire (other than increasing your own income) see bill curry……
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I could see Dabo possibly going there, but not as Saban’s immediate successor. You know the old saying, you don’t want to be the man who follows “The Man”. Let some other chump go in there and get fired after 3 years for not being Saban, then go in and be the hero.
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What are y’all talking about. Kiffin’s the man in line.
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Harbaugh has yet to come within 4 touchdowns of his school’s biggest rival, even, much less win the Big Ten.
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The benefits of unpaid labor. The NCAA just pees right on the player’s rugs. Every year.
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