The coach as CEO (an $11 million salary?)
How Nick Saban’s pay stacks up
TUS CALOOSA, ALA. Nick Saban is being paid $11.1 million to coach football at the University of Alabama this season. He’s the first coach to break the $10 million barrier since USA TODAY Sports began tracking major college coaches’ compensation in 2006. And it gets Saban into the stratosphere of CEO-style pay.
That’s OK with Alabama President Stuart Bell, who fig- ures Saban is essentially the CEO of Alabama football. “Even the academic deans we hire,” Bell tells USA TODAY Sports, “we look for CEO skills.”
The median total compensation for CEOs is $11.5 million, according to 2017’s Equilar/ Associated Press pay study of CEOs with at least two years’ experience at S&P 500 companies. The median compensation for head football coaches is a little more than $3.3 million in the five
wealthiest conferences (Atlantic Coast, Big 12, Big Ten, Pac-12 and Southeastern) plus Notre Dame. That’s up by almost $1 million since 2013.
Alan Johnson, a compensation consultant who studies CEO pay, thinks the comparison between coaches and CEOs is apt.
“I think at the big programs, that’s a fair estimation,” he says. “They run a pretty big operation. They’re responsible for a lot of money. It’s an extraordinarily competitive business. So, yeah, they certainly look much more like a CEO than they did 20 or 50 years ago, in simpler times when the money was not as big.”
One difference, Johnson says, is that sports is a zero-sum game with a loser for every winner, while in business many companies can be successful at the same time.
Saban’s compensation for his current contract year exceeds the $8.3 million made in 2015 by the CEO of the state’s biggest public, non-financial company, according to figures published this year by Business Alabama. Vulcan Materials Co., the construction supply concern headed by Tom Hill, had $3.4 billion in sales in 2015.
Saban’s pay for this season includes a $4 million bonus that Alabama athletics director Greg Byrne says is a recognition of what Saban accomplished in his first 10 seasons at Alabama, including four national championships.
“If you’re at Alabama, where I happen to be a season ticket holder, it’s beautiful,” says Johnson, the compensation consultant who is based in New York and can only get to a couple of games each year. He was born in Alabama and his father went to the university.
Jed Hughes, vice chairman and leader of Korn Ferry Sports, helps universities and pro franchises in their searches for talent for key positions in sports, including coaches. He was also at one time a consultant for CEO searches.
“The reason salaries go up” for CEOs and for big-time coaches, he says “is there is a dearth of talent. The talent supply is limited. So therefore trying to find someone who has experience at the highest levels, you’re in rarefied air.”
One difference, he says, is that businesses can offer a mix of cash plus stock and equity while colleges work largely on a cash model.
“The market drives the price,” Hughes says, whether for a CEO or a coach. “They’re going to pay what they need to, to get that person.”