Split-dollar life insurance policy gives Tigers component to keep coaches happy
Clemson defensive coordinator Brent Venables will get a raise and will have a year added back to his contract, which right now is worth $11.6 million, the largest of its kind for an assistant football coach.
Graham Neff, Clemson’s Deputy Athletics Director, explained Venables did not get a raise on Friday with the other nine assistant football coaches because Clemson needs to sit down with the long-time defensive coordinator and negotiate what he wants to do within the contract’s structure.
Clemson University’s Board of Trustees Compensation Committee approved contractual changes for Dabo Swinney’s other nine on-field coaches, increasing the assistant coaches combined salaries to $7.195 million, the largest in college football at the moment.
That number will likely go up when Clemson restructures Venables contract at the next BOT meetings in April.
“Coach Venables is a little different because most of these have just been add-ons with dollars onto their existing packages,” Clemson Athletic Director Dan Radakovich said.
Last July, Venables received an upgrade to his existing contract when Clemson added a $200,000 retention bonus piece to the deal. Venables base salary was still the $2 million he was awarded in February of 2018.
The retention bonus is a split-dollar life insurance component, which Venables puts 100-percent into a life insurance policy that he can pull from later on as an annuity.
“We take a portion of their salary and invest it in a long-term life insurance instrument, whereas at a future time the employee will receive an annuity, a pension in a simple since, and some sort of a death benefit. It is a life insurance policy,” Neff said.
It’s the reason why Clemson wants to sit down with Venables and make sure, when they add back the fifth year, he is getting what he wants and how he wants to use the money.
“He was out on the road recruiting during the month of January. There is a desire to move forward to extend him back to five years, but it will take a little longer based on how that mix pulls together with that additional component,” Radakovich said. “We have talked about that and we will try to get that done probably the next time the board gets together.”
On Friday, Clemson moved co-offensive coordinators Tony Elliott and Jeff Scott into the millionaire club by using the split-dollar life insurance component.
The coordinators had one year added back to their original three-year contract with a base salary of $850,000. They can use the $150,000 bump as part of their salary or they can use part of it, half of it or 100 percent of it and put it into the life insurance.
“The $150,000 increase, they can take it as salary and that would be the million-dollar salary or because we have this product available to us, is that there is a better deferred compensation type of circumstance for them long term that we have available,” Neff said. “It is really up to them.”
Split-dollar life insurance components are the new thing in college coaches’ salaries. When Swinney got his raise in 2017, he took part of his signing bonus and used it. President Jim Clements has a component of it built into his contract.
Men’s head basketball coach Brad Brownell’s contract is set up like Elliott’s and Scott’s where he can take a portion of his salary each year and has the option of investing it into the life insurance policy.
Michigan head coach Jim Harbaugh was the first one to really use this instrument into his contract, which gives both the employee and the organization security.
“We have been aggressive with it because it has some benefits that come back to the organization as well,” Neff said. “There are some incentives for the organization to offer that.
“They’re all a little different,” he continued. “Dabo’s was an upfront kind of signing bonus. Brent’s is at the end of the season, a retention type bonus. Brownell’s is kind of every year, which is kind of what Jeff’s and Tony’s will be. You have that type of flexibility and you just look what the employee is looking for from a family-planning standpoint and how that meshes.”
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