Living the buyout life: Coaching $$$
Interesting article if a bit long.otw of references to Hoke and his career arc. this is a deeper dive on Assistant pay
Ole miss quote:
If Kiffin retains MacIntyre, it could save the university from paying three current or former Rebel defensive coordinators at the same time
December 11th, 2019 at 9:45 AM ^
Not a good system when coaches continually failing at their job nets them millions of dollars while athletes like Denard don't see a penny until they leave the school
December 11th, 2019 at 9:51 AM ^
Your post reminded me of that ESPN commercial where the cowboy is in the desert or somewhere using a tablet to watch somebody get Denarded while sitting in a bathtub. I wonder if NIL means he would have to be paid for that.
December 11th, 2019 at 12:02 PM ^
Damn, blast from the past. Totally forgot about that.
December 11th, 2019 at 12:40 PM ^
There is nothing in my brain that I can use for my own benefit.
December 11th, 2019 at 9:53 AM ^
Lol there should be a rule that, if you're paying them, you can make them work for it. I can think of tons of comedy that would follow
December 11th, 2019 at 10:36 AM ^
Would be pretty funny if you could have your former HC sweep the floors or be the towel guy.
Joking aside, though, it could not happen. Most executive level contracts contain clauses that the employee can only be asked to perform specified functions or have a specified title. Guarantee that every HC contract has a clause that coach cannot be asked to accept any position other than HC of ___ team.
December 11th, 2019 at 10:36 AM ^
Would be pretty funny if you could have your former HC sweep the floors or be the towel guy.
Joking aside, though, it could not happen. Most executive level contracts contain clauses that the employee can only be asked to perform specified functions or have a specified title. Guarantee that every HC contract has a clause that coach cannot be asked to accept any position other than HC of ___ team.
December 11th, 2019 at 4:45 PM ^
Yeah too bad we weren't smart enough to put a NO COMPETE clause in our contracts for assistant coaches who decide to go to OSU... it's already fucked us in the ass once. Can't believe the legal department at Michigan sucks that bad.
December 11th, 2019 at 10:52 AM ^
I don't think it's any different than corporate executives falling "up".
EDIT: JamesBondHerpesMeds beat me to it... hadn't read past this comment and then saw theirs.
December 11th, 2019 at 2:52 PM ^
Here to say that I'm glad you refer to us, the Meds, in the plural.
December 12th, 2019 at 12:43 AM ^
It's a lot worse than "not good". It's completely fucking evil.
December 11th, 2019 at 9:54 AM ^
I mean, it's just like the golden parachute in corporate America. Hell, Google paid out one of their engineers $90 million after he got let go for sexual misconduct: https://www.theguardian.com/technology/2018/oct/25/google-andy-rubin-android-creator-payoff-sexual-misconduct-report
Failing up: as American as apple pie.
December 11th, 2019 at 10:58 AM ^
Yikes that's disgraceful. Maybe we should write something into the tax code that would take 99% of those buyout sums if they're over a certain amount.
I'm astonished at what horrible negotiators college athletic departments are - and it's like every single one of them. I would love to see a university sneak in a clause requiring the coach to sweep floors and pick up jockstraps as mentioned above. The fact that college coaches have such weak job security but also get outrageous salaries and even more outrageous buyouts is ridiculous to me. The universities are definitely getting the raw end of the deal.
December 11th, 2019 at 12:35 PM ^
It isn’t that they are bad negotiators, it’s what the market demands. If you identify someone you believe is a good coach, a guy you think will help your school be a winner, odds are others view him the same way. If you don’t give him certain terms, he will look at other offers. Someone will give him what he wants. The problem is not the negotiating, the problem is how much discretionary money is available to schools from TV and other revenue sources, and the huge difference fielding a winner as opposed to a consistent loser makes for the image of a school and the alumni and student body support for the program.
December 11th, 2019 at 1:50 PM ^
It's tough to make useful analogies because these coaches that get fired are mostly good at their jobs.
Take Ole Miss, for example. Matt Luke seems like a perfectly good coach. He wouldn't get fired in nearly any profession and probably wouldn't have been fired at most other schools. But Ole Miss decided they should win as much now as they did at the peak of Freeze's blatant cheating. So Luke gets a buyout instead of a salary. So do most of his assistants.
The university isn't just getting the raw end of the deal. They're demanding it. They want to gamble on the new shiny object who will probably pay them a buyout if he has much success.
December 11th, 2019 at 8:34 PM ^
No on the tax code change. Just write better contracts.
December 11th, 2019 at 11:02 AM ^
Our economy is so broken that rank incompetents fired for gross malfeasance make more than the common man actually keeping the company afloat.
December 11th, 2019 at 11:11 AM ^
Yeah - I view today's executive class as modern-day robber barons; only in it to extract as much value for themselves and then get out. At least the robber barons of old were competent and business-savvy.
The CEO-to-worker pay ratio in most companies is disgusting now and it has been shooting through the roof for the past few decades.
December 11th, 2019 at 12:51 PM ^
I don't care how much profit my CEOs make. Good for them. I agreed to work for the company at the terms- hours, pay, etc., i did, and the rest is the rest. Shame on me for not getting more if there was more available. But for me to complain how much a ceo makes? Not my complaint to make.
December 11th, 2019 at 1:23 PM ^
But you should Paul.Let's say you and your colleagues help create $10m in annual profit for your company. But he CEO takes $9m of it while coming in at 10 and leaving at 2 to play golf everyday and never doing anything. That's not such a good deal for Ol' Paul, is it? Sounds like you and your co-workers might be worth more than what you're getting. Don't take money out of your own pocket.
December 17th, 2019 at 5:27 PM ^
If I'm unhappy with it, i have the opportunity to seek a better deal. Either with the company or a new company. Regardless of the ceos paycheck.
December 11th, 2019 at 2:10 PM ^
I don't care what CEOs make either. I made my way up to middle management, and have accepted I won't get any higher. I'm fine with that, I have neither the drive, nor the ability to do what they do.
I live comfortably, I have a wonderful family, and a good plan for retirement as long as things continue approximately the same as they are now (which despite people predicting 'The End' for my entire life it has reliably failed to End). I begrudge no one what they have earned, or not earned.
Life isn't fair. You were probably confronted by that for the first time in 3rd grade. If you want to go through life hating people who have more than you, the only person you make unhappy is you.
December 11th, 2019 at 2:30 PM ^
Have you seen the charts showing executive pay growth over the past 40ish years? We're in a situation where executives make several hundred times what the average employee makes, which has resulted in a severe concentration of wealth at the top of the income scale.
The middle class has gotten smaller and smaller and people born into it are now more likely to go down a level during their lives instead of going up. We (GenX), are the first generation to have less income, wealth, and assets than our parents and it's even worse for the ones behind us. I'm a 42 year old father of two and my largest single annual expense, by a wide margin, is healthcare. All that money isn't being spent on vacations, retirement savings, or consumer goods.
Even if you have no moral objection to this, which quite frankly you should, the destruction of the middle class and the concentration of wealth into so few hands will eventually result in economic collapse.
We are the first poor rich country on Earth.
December 11th, 2019 at 3:26 PM ^
my largest single annual expense, by a wide margin, is healthcare. [...] and the concentration of wealth into so few hands
#nopolitics... since the goverment took it over, most state exchanges are bankrupt or down to a single provider. That's just fact and has nothing to do with a "R' or a "D". As my healthcare clients tell me insurance reform without tort and policy reform is pointless.
December 11th, 2019 at 3:52 PM ^
Employer self-funded plans (like most of us have) are not covered by ACA regulations. Companies just figured that they could jack up the costs for employees and said employees would blame the ACA.
They were right.
December 11th, 2019 at 4:02 PM ^
That's not entirely accurate.
The ACA has language in it for employer plans if they are too generous. i.e., the Cadillac tax.
Moreover, the ACA has had a transitive effect on your premiums public or private -- because the same insurers participate in both and as others have posted, they only care about the bottom line.
I get what you're saying... truly do. At my last job we lost our best employee because his OOP costs were $40K a year. He found a company that didn't give a shit about the Cadillac tax... he pays nothing other than his payroll deduction. No prescription, no copay, no coinsurance... nada.
It's cool though, we can agree to disagree. I have certainly seen your situation first hand and definitely empathize with it.
December 11th, 2019 at 3:26 PM ^
The middle class has gotten smaller because the Upper Middle class and Upper classes keep getting bigger. Look it up.
And really. Look around your house. Maybe not your specific house. But the average house. Do you know how hard it is to even find a new house under 2,000 square feet? I'm GenX too, and grew up in new-ish houses all under 1,000 sq ft. My Mother and Father both grew up 3 to a bedroom. We are most assuredly not poorer today than I grew up, or my parents. And it's not even close.
The middle class is ridiculously rich today compared to when you and I were young.
The only thing I can agree with you on is how much harder it is to move between the social classes. People raised poor, or lower middle class are really looked down now if they try to get into an technical or highly educated industry.
December 11th, 2019 at 3:55 PM ^
When we were growing up most middle class families got by just fine on a single income, and even stupid people could make a good living working at a factory.
I'm way behind where my parents (and my inlaws) were at my age.
December 11th, 2019 at 6:15 PM ^
Healthcare cost has nothing to do with CEO pay. We are an unhealthy country and we are forced to pay for others health problems....obesity is a real big issue and no one wants to do anything about it and then you have eldercare which is a total racket. We will easily spend millions to keep someone who is 75/80/85 alive an extra 4 years. Makes no sense.
December 11th, 2019 at 3:44 PM ^
The gutting of the middle class is due to Reagan and has continued for the last 40 years. His tax cuts for the uber rich along with current amounts of corporate welfare are what is causing the economic problems in the US.
Before those changes tax rates for the uber rich and very profitable companies used to be 70%- 90%. Rather than give this money to the government many companies gave it to the workers along with reinvesting in the company.
This is the reason that the most prosperous and profitable time in America coincided with high taxes on the very wealthy, low amounts of corporate welfare, and unions.
It is pretty clear that "job creators" and "trickle down" has shown to be lies. With the latest round of tax cuts for the super rich it's going to get even worse.
America is doomed. I would be surprised if it is still here 100 years from now. At some point people are going to revolt. Just ask Marie Antoinette.
December 11th, 2019 at 5:50 PM ^
This is incorrect......it wasn’t tax policy, it was the fact we couldn’t offshore our labor and the sell our goods in the US back then. Once companies figured out they could lower their largest expense (labor) roughly 90% by offshoring everything - goodbye middle class!
December 11th, 2019 at 6:49 PM ^
congress makes the budget. reagan had a dem congress, right? therefore not reagan's 'fault' re: tax cuts. and when you remember that we had been in a brutal 'stagflation' cycle, it seems that whatever they did worked out reasonably well given the realistic alternatives.
December 11th, 2019 at 2:21 PM ^
Your CEO and his political allies are doing everything in their power to take away your right to collectively bargain. Makes it tough to negotiate for what you're worth.
December 11th, 2019 at 3:10 PM ^
This guy gets it.
When, in freaking America, the supposed land of opportunity, did we start giving a shit about what someone makes? Rhetorical question... it shouldn't matter.
December 11th, 2019 at 3:34 PM ^
When, in freaking America, the supposed land of opportunity, did we start giving a shit about what someone makes?
Probably when tax rates were set up in a way that disproportionately affected the wealthy - around non-cash compensation, property owners, etc.
I don't care if someone makes twice as much cash as I do, but when I know that they probably will be making millions in stock compensation and can find ways to pay virtually zero tax on that - that's money no longer funding yours and my roads, public schools, and emergency systems. I'd very much like those to continue to be funded (if not more funded), and - sorry libertarians - I don't trust a bazillionare to do so out of the goodness of their heart.
One needs to look only at the rise in million-dollar-plus properties in California, the precipitous decline in public school funding and California's education rates, and Prop 13 to understand where this all moves toward.
December 11th, 2019 at 4:09 PM ^
Probably when tax rates were set up in a way that disproportionately affected the wealthy
Perhaps you're confusing the difference between payroll taxes and investment taxes. Take two general election cycles ago for example. The MSM crucified Mitt Romney for not paying his taxes.
The problem with that whole line of thought is it WAS NOT an apples to apples comparisons.
His tax rate is lower because most of his income is from capital gains. Which is taxed at a lower rate than payroll tax.
I don't know about you but if my investments were taxed at the same rate as payroll, that would definitely affect my ability to retire when I want.
December 11th, 2019 at 5:03 PM ^
His tax rate is lower because most of his income is from capital gains. Which is taxed at a lower rate than payroll tax.
Yes, and that's exactly what I mentioned (wealth vs. income) in the rest of my comment.
And on the whole, capital gains (and investments in general) are far, far easier to avoid paying tax on than payroll, which is why a person of wealth's adjusted tax rate will be, at times, orders of magnitude lower than those of someone with fewer assets.
The issue also lies in the fact that we're told that it allows for wealthier people to give more charitably. That's patently false - for many people, a large proportion of their wealth is sewn up in property, the most illiquid asset there is. Nobody I know is taking out a home equity loan to fund public schools.
December 11th, 2019 at 5:57 PM ^
Property tax is the #1 source of funding for schools......so they are, in fact, paying for schools and roads, etc.
there are many taxes, if you own property, you pay a shit ton of taxes. Especially commercial property which is often taxed at a higher rate than residential.
December 12th, 2019 at 9:55 AM ^
And again, I will point everyone back to Proposition 13 as the example of what happens when property taxes are curtailed by an outside influence - and its outsize effects on public school funding/quality.
December 11th, 2019 at 12:56 PM ^
A lot of the robber barons were equally poor at running businesses as WeWork's founder. The transcontinental railroads went bankrupt innumerable times. The New Gilded Age analogy is particularly apt in this respect, as the directors of those railroads managed to extract immense personal wealth amidst the chaos caused by their failure (ironically leading to the creation of the institution, "Leland Stanford Jr. University," that's given rise to a lot of contemporary executive excess).
December 11th, 2019 at 1:12 PM ^
As MGoBlog's resident "fuck Stanford" guy,
....
....
FUCK STANFORD.
December 11th, 2019 at 1:34 PM ^
From Richard White's Railroaded:
"Huntington despised Stanford. 'I am disposed to think,' Huntington had written Charles Crocker in 1871, 'Stanford will go to work for the railroad company as soon as the horse races are over. Of course, I do not expect anything until then.' And once he wrote Stanford himself, 'I wish you would tell me whom to correspond with in Cal. when I want anything done; for I have become thoroughly convinced that there is no use in writing to you.' The other Associates shared his disdain. Their writing on Stanford is a chronicle of amazement, dismay, and irritation at his greed, laziness, ignorance, and ineptitude. Mark Hopkins thought Stanford's key quality was his intellectual torpor. 'He could do it,' Hopkins told Huntington of some necessary task, 'but not without more mental effort than is agreeable to him.' Men who had once been Stanford's friends were even less generous. Ex-Senator Conness of California railed against Stanford as 'this immensely stupid man,' who had forgotten that he 'had helped make his fortune.'"
(White wrote this book while appointed as the Margaret Byrne Professor of American History at ... Stanford).
December 11th, 2019 at 11:17 AM ^
That's how the system works. It's not economy. It's capitalism. Whoever is close to the equity/cash pile, makes rules to keep more of it flowing to their own pocket. Most of us would do that. Nothing to be ashamed about. The one thing they should do (when they are in that position) that help the ones who don't have enough.
December 11th, 2019 at 11:35 AM ^
"It's not economy. It's capitalism."
It's the nature of the "system" in individual economies—American CEO compensation in relation to average worker pay is the highest in the world, in comparison to the capitalist economies of Germany, Switzerland, the Netherlands, Spain, and Canada. Japanese CEO compensation is so low by comparison that it's not even on the list.
December 11th, 2019 at 12:14 PM ^
When I was 12, Magic Johnson signed a $25MM "lifetime" contract with the Lakers. It sent shockwaves through the sports world and spurred many debates about whether athletes are "overpaid." I didn't think so then and I don't now. I'd ask people, "would you prefer if the owners kept those millions? and if so, why exactly?" I don't think ADs are "horrible negotiators" because they agree to buy-outs, I think they are dealing with market realities. They could either pay more in a signing bonus, pay more per year in salary or pay less on those and include a golden parachute kicker. We are offended by someone making money "when they aren't working," but it is just a way to defer income. It's no different from the perspective of the AD negotiating it, and in fact pushing things to later years can save money.
Does it bother people that Beyonce makes exponentially more than the average singer? Does it bother people that the "average singer" makes no money at all and ends up giving up that dream and getting a non-singer job? Do we think Beyonce ought to give some of her money to average singers? I don't. I'm not sure why CEO salaries bother people any more than Beyonce salaries. Some CEOs wind up as busts, but when they are hired, they are hired because the hope is they'll be worth the money. And when the guy in the cubicle with the entry-level job is hired, and paid an entry-level salary, the market and perceived value drives his compensation.
I'm more upset when it seems that some people are denied fair opportunities to be CEOs. But I'm not upset when some people manage to put themselves in a position to be hired and paid a lot of money to be a CEO or coach of a Power Five football team. And I'm not upset that Beyonce makes a ton of money.
December 11th, 2019 at 12:53 PM ^
Brady Hoke ≠ Beyonce.
December 11th, 2019 at 1:51 PM ^
True. Beyonce wears a headset.
December 11th, 2019 at 4:15 PM ^
Equal opportunity ≠ equal results.
@Holmdel gets it.
December 11th, 2019 at 12:27 PM ^
I disagree - it is something to be ashamed about. To have such out-of-control pay ratios suggests one of two things: 1) these companies legitimately believe that the work of a handful of MBAs at the top of the power structure is worth disproportionately more than the work of hundreds or even thousands of other employees or 2) the people close to the "cash pile" are taking too much for themselves. Do I think executives should get paid more than average employees? Of course. The question is how much more - we shouldn't be leaving productive workers in the cold so the CEO can buy another yacht.
It's greedy and its stupid and its hurting our economy. A few extra bucks here and there for your average worker goes so much further than another absurd bonus for some clown on the board.