Jim Harbaugh's new contract extension, which is heavily laden with incentives and contains low buyout figures, appears highly favorable to Michigan's athletic department.
According to documents obtained by the Free Press, Harbaugh will earn $4 million in total base salary during the first year of his new deal — roughly half of what he earned in the 2020 season.
His base salary is $605,000 for each year of the deal, which could take him through 2025, while additional compensation starts at $3,395,000 in the first year (combining for the $4 million in total) and escalates to as much as $3,821,102 in the final year.
Harbaugh's full compensation in Year 1 of the new deal — $4 million — would make him the eighth-highest paid coach in the Big Ten last year, according to USA Today's database of college football coach salaries. He was previously the fourth-highest paid coach in the nation, making $8,036,179.
Without incentives, Harbaugh can earn up to $4,101,850 in Year 2, $4,206,756 in Year 3, $4,314,808 in Year 4 and $4,426,102 in Year 5.
It would cost Michigan $4 million to buy out Harbaugh after the first year of the new deal, with the buyout figure dropping by $1 million with each following year. It would cost the Wolverines $0 to buy out Harbaugh in the final year of his deal.
If Harbaugh were to leave on his own accord, he would have to pay a $2 million buyout in Year 1, $1,500,000 in Year 2, $1,000,000 in Year 3, $500,000 in Year 4 and $0 in Year 5.
The memorandum of understanding, which was signed Friday afternoon by Harbaugh and officially announced by the athletic department shortly after, outlines his full incentives package. In each year of the deal, Harbaugh can earn up to $3,475,000 by accomplishing certain goals.
He would earn $1 million for winning the College Football Playoff, $1 million for winning the Big Ten, $500,000 for reaching the College Football Playoff Semifinal semifinal, $200,000 for reaching a New Year's Six bowl game, $500,000 for winning the Big Ten East outright, $150,000 for an APR-related incentive, $75,000 for winning National Coach of the Year and $50,000 for winning Big Ten Coach of the Year.
This article originally appeared on Detroit Free Press: Jim Harbaugh's Michigan football contract details: Breaking it down