Clemson Purchases Insurance for Coach Bonuses

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CLEMSON â€” Success can be expensive.

The Clemson University athletic department has committed to competing at the highest level. That demands spending at the highest level.

Clemson spends sharply to ensure that its facilities never fall from the cutting edge. Clemson also spends generously to compensate coaches comparably to their peers.

Clemson will spend $15.6 million this academic year in total salary for the football and men's basketball coaching staffs. Clemson could owe nearly $3million more if those two teams accomplish their loftiest missions.

Football coach Dabo Swinney, men's basketball coach Brad Brownell and all of their assistants have performance incentive packages in their contracts. The more they win, the more the department pays.

Clemson awarded Swinney and Brownell a combined $480,000 for postseason bonuses last season. This year, the program prudently protected its pockets in anticipation of another successful stretch.

Clemson secured an insurance policy for incentive bonuses with Risk Point Consulting, a firm based in Marietta, Georgia. According to Clemson associate athletic director Graham Neff, the policy insures approximately $1.25 million but includes a $215,000 premium and a $425,000 deductible.

Clemson could exceed the deductible before the midpoint of the basketball season. If the football team reaches the College Football Playoff semifinal for a fourth consecutive season, Swinney will earn a $200,000 bonus. Each of his 10 assistant coaches will receive $50,000.

The insurance policy would cover any remaining bonuses, up to $800,000.

"Obviously, it's impossible to project what our actual payout will be, but the insurance gives us a way to cap our exposure," Clemson associate athletic director and CFO Eric George said. "We know our maximum cost will be the premium amount plus the deductible, and we can use that figure as we plan the rest of our departmental budget."

Clemson purchased a similar policy before the 2016 season, but only for football. It saved the department $1.3 million in bonus payments after the Tigers won the national championship.

Clemson did not secure insurance last season. Swinney earned $400,000 for winning the Atlantic Coast Conference championship and reaching the Playoff. Men's basketball coach Brad Brownell earned $80,000 for advancing to the Sweet 16 of the NCAA Tournament.

Clemson administrators included men's basketball in the insurance policy this season, after agreeing to a six-year, $15 million contract with Brownell.

If the football and basketball teams rise to last season's watermark, Clemson would owe $1.2 million in bonuses to both staffs. However, only $937,500 of that total would be insured.

The policy Clemson purchased this season does not cover the football team's achievements outside the Playoff. Bonuses offered for winning the ACC and reaching a non-CFP bowl game are not included.

If Clemson wins the national championship, the staff would earn $2.3 million in bonuses, including:

$200,000 to Swinney and $10,000 to each assistant for winning the ACC title

$200,000 to Swinney and $50,000 to each assistant for reaching a CFP semifinal

$200,000 to Swinney and $60,000 to each assistant for reaching the CFP final

$250,000 to Swinney and $25,000 to each assistant for winning the national title

Swinney could also earn another $75,000 for winning ACC and national coach of the year awards. Defensive coordinator Brent Venables could earn an additional $200,000 if the Clemson defense finishes in the Top 5 of two specified statistical categories.

The maximum bonus for Brownell and his three assistants is $1.07 million, including:

$150,000 to Brownell and $5,000 to each assistant for earning the No. 1 seed in the ACC Tournament

$100,000 to Brownell and $5,000 to each assistant for winning the ACC Tournament

$50,000 to Brownell and $5,000 to each assistant for appearing in the NCAA Tournament

$50,000 to Brownell and $2,500 to each assistant for each NCAA Tourney win in the first three rounds

$75,000 to Brownell and $2,500 to each assistant for each win in NCAA Tourney Regional semifinal and final

$100,000 to Brownell and $2,500 to each assistant for winning a National Semifinal

$250,000 to Brownell and $10,000 to each assistant for winning the national championship

Brownell would earn another $75,000 for winning ACC and national coach of the year.

Risk Point pitches incentive insurance each season to more than 50 college programs, according to president Michael Wright. However, the policies vary based on the realistic expectations for each team.

"You're not going to Middle Tennessee and insuring against their national championship bonuses," Wright said, "but they may have a level of bonuses within their coaches' contracts that are based off of making a bowl game or winning a certain number of games. Their bar is going to be lower than Clemson's, but it still has that same financial impact on their budget if it happens."

The insurance policies help programs prepare for the best. They are also assurance policies for coaches.

"We rarely talk about the bonus insurance with our coaches," George said, "but we'd certainly like to think that it is one of the ways that we can show our confidence in them."


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October 13, 2018
 
 
 

 

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