Your job is unlike anyone else's on campus--and your employment contract should be just as unique. Here's the latest advice on how to negotiate the best deal for you.
By David O'Brien & Dr. Elizabeth Alden
David O'Brien, JD, is a Senior Associate and Elizabeth "Betsy" Alden, PhD, is President/CEO at Alden & Associates, Inc., a consulting firm specializing in executive search services for colleges and universities. O'Brien is a former Director of Athletics at Northeastern University, Temple University, and Long Beach State University with a law degree from Seton Hall University. Alden is a former Director of Athletics at the College of Notre Dame of Maryland, Webster University, San Francisco State University, and Ithaca College and currently serves as Chair of the American Council on Education's Executive Search Roundtable. They can be reached at: www.aldenandassoc.com.
If you're like most athletic directors, you pour your heart and soul into your job. You work hard to mentor every coach, listen and respond carefully to a long list of constituencies, and advocate endlessly for your student-athletes. You are fundraising more than ever and diligent about the bottom line. And, of course, you work long hours and countless weekends.
So, are you being properly compensated for all you're doing? That can be hard to know since the job of athletic director has changed so much over the years and no one else on campus has a job similar to yours.
That's why it's critical to know how to negotiate your employment contract. It may seem simpler to accept whatever salary and benefits you are given, or leave the whole thing up to your lawyer. But that puts your fate in others' hands. Whether you are starting a new job or continuing in your current position, it is in your best long-term interests to carefully discuss and define the exact terms of your employment.
MORE THAN MONEY
When thinking about employment contracts, the first thing that comes to mind is usually money. What is my salary? But good employment contracts are much more than that.
Specifically, they are written agreements between an institution and its athletic director that define the individual's role over a specific period of time, usually three to five years. They should outline your responsibilities, reporting structure, salary, benefits, perks, renewal, and the terms and conditions should either side decide to end the contract early.
Often, it's best to spell out responsibilities and reporting lines as the initial area of negotiation. Agreement on these specifics is needed before the two parties can fully discuss compensation.
Responsibilities vary greatly from one school to the next and will likely change over time. Be sure that the specific roles and priorities of your position are put in writing. For example, are you expected to be both the internal day-to-day manager of the department and also the chief fundraiser with a high annual goal?
In addition, clarify the organizational reporting structure for the position. Sometimes it is advantageous to report to the president, but in other situations reporting to a vice president makes more sense.
It is also important to fully understand who reports to the athletic director. Is the academic counseling area under the athletic director or the provost? Does the compliance unit report to the athletic director or the general counsel? Will the athletic director or the vice president for development oversee athletic fundraising?
Another up-front area of discussion should be performance expectations. How exactly will your performance be measured? Be sure you are comfortable with the goals and review process, and have it put into the contract.
Then, be sure to ask for the resources you think you will need to be successful. For example, if additional budget or staffing are needed to reach your goals, this is the best time to secure those commitments. Remember, no matter how talented an administrator you are, you cannot succeed unless the president wants you to succeed and is willing to provide the resources to make it happen. You may as well test that support in the negotiation period.
Finally, ask about the right of the institution to reassign you to another administrative role, which is a provision in many contracts. Decide whether this is acceptable, and if not, ask if it is negotiable. If the clause remains in the contract, you should attempt to define limited circumstances under which this option may be exercised.
With clarity on the big picture items and what exactly you'll be responsible for, you can begin to discuss what you receive in return. It's best to start by assessing how much negotiating the institution is willing to do.
Look for clues during the interview process and as the school begins to make an offer. Listen to the words used and assess body language while the offer is being made. Is the school open to negotiations or making a firm offer?
In almost all situations, some back and forth is both acceptable and expected. More than most other university administrators, an athletic director must be comfortable and effective negotiating, and you may actually be judged based on the way you negotiate your own employment contract. Therefore, the manner in which you do this is an important first step in your new relationship.
Often the institution's representative will ask you to specify what compensation level you had in mind to start the discussion process. It is important to have done your homework so that you can express your expectation with a sense of both confidence and fairness.
Throughout the conversation, advocate for yourself and your family in a polite, but firm manner. Remember that your future compensation and protection depends on what you were able to secure as a foundation walking in the door. The number-one arguing point is that in college athletics, expectations need to be commensurate with resources and that begins with compensation for the athletic director. Expressing this principle is a way of stating that you ultimately get what you pay for.
Then, do not sell yourself short in the negotiating process. Research all the factors that you want addressed in the contract and prepare to fight for them. If the institution is not fair and amenable in its approach, it is doubtful that things will improve once you are on board. This could be a sign that it might not be the right situation for you.
Be sure to separate the different aspects of the job offer: salary, benefits, supplemental compensation, term, responsibilities, and liquidated damages. Each category needs to be negotiated distinctly and it is the combination of all these factors that constitutes your package. An institution probably cannot meet your demands in every area, but it should be flexible in some of them. For example, there may be no wiggle room on base salary, but adding several incentive clauses would be okay. (See "Bonus Round" below for a look at some current trends in such clauses.)
If an offer appears firm, be creative by negotiating for alternative benefits. This can include relocation expenses, a housing allowance, car stipend, bonuses, or supplemental compensation that is based on new revenue generated or longevity.
To ensure accuracy, repeat the offer out loud after you hear it so that there is no confusion. In addition, ask questions on any areas that you are not sure about. This clarifies that everyone is on the same page, and it also may prompt the institutional representative to sweeten the offer so that it sounds better.
DOLLARS & SENSE
The heart of the negotiation process will focus on the compensation package. This area requires special attention so that all dollar amounts and benefits are discussed with precision and mistakes are eliminated in drafting the contract.
Going into this discussion, it's important to understand the market value for your position by researching salary levels. This is often difficult because there are no comparable positions on campus. Generally, the unique aspects of an athletic director's job and the high visibility of the position demand a salary level at the vice presidential level with additional supplemental compensation opportunities. You can also speak with colleagues at similar institutions or within your conference and seek out data from sources such as The Chronicle of Higher Education or NACDA.
Then, think about what is important to you in terms of compensation. The following is a checklist of items that you might want to consider during negotiations over your compensation package:
• What is the starting salary and how will it be increased in the future?
• Will there be a signing bonus? This is especially important if you are walking away from compensation (such as a longevity bonus) that would have soon been owed you at your previous job.
• What will be the process for merit increases? When is the first time you will be considered for a merit increase? How often will this occur?
• What are the categories for bonuses and what will the criteria be? Some suggested areas to consider are academic incentives, victories, conference championships, postseason appearances, attendance goals, fundraising goals, and longevity.
• Will the institution pay any temporary housing expenses? Will a housing allowance be provided for the duration of the contract?
• Will the institution pay relocation expenses? Is there a cap on these expenses or other limits, such as procedural requirements or specified vendors that can be used?
• Are there any expense limitations on your travel to games? Can someone else travel with you at the institutionís expense?
• How many tickets will you receive for each home game? How many will you receive for away games? How many will you receive for conference championships and NCAA tournaments?
• Will you or others in your family be eligible to receive tuition remission for taking classes at your institution? Are there reciprocal relationships with other schools?
• Will you receive any complimentary club memberships? If so, what expenses at the club are covered by the institution?
• What are the health and retirement benefits? Are there any beyond the standard benefits for institutional employees?
• Are you free to endorse products and retain the fees? Are you allowed to have your own radio or television show or accept speaking engagements and retain the fees?
Hand-in-hand with compensation is contract length. In most situations, you should look for a minimum three- to five-year agreement. This timetable acknowledges the difficulty inherent in running a complex intercollegiate athletics program. Anything shorter than three years entails significant risk. It indicates that the institution may not have complete confidence in you and does not provide you with a long enough period to achieve success.
You may want to build in a rollover provision that specifies the contract will automatically be extended for a certain period of time if the athletic director reaches measurable goals or the institution fails to end the employment by a specific date. Another option is to add a clause providing a window of time when the parties must renegotiate terms of the agreement. This ensures you don't end up working without a contract once your new contract expires--and that you get a formal review from your supervisor.
JUST IN CASE
While you may have the utmost confidence you will never be fired, it is still important to have a section outlining the conditions under which the contract may be terminated prior to its end date. Such a scenario can easily arise simply by alienating a key constituency, because a new president is appointed, or if thereís a change in direction by the trustees. At the same time, the institution will likely want language establishing penalties if you leave the position early.
This section should essentially specify the circumstances under which the institution can terminate you and under what conditions you can leave the institution prior to the end of the contract. It should also include a provision on liquidated damages, which defines any compensation the institution will be required to give you or that you will owe to the institution.
If the termination clause is invoked by the institution, there is probably going to be some acrimony. To protect yourself, be sure that this section includes some type of due process. Ideally, you want to be given the opportunity to present evidence challenging the termination decision to someone other than the decision maker.
A contract normally includes provisions allowing termination by the university for just cause. Negotiations in this context involve which transgressions can trigger the firing. Common reasons include:
• Failure to adequately perform the duties as athletic director
• Violations of the athletic directorís contract
• Conduct that could constitute a crime
• Conduct that constitutes an offense of moral turpitude
• Conduct that brings the institution into disrepute
• Violations of university, conference, or NCAA rules by the athletic director
• Violations of university, conference, or NCAA rules by student-athletes, coaches or administrators
• Conduct that is seriously prejudicial to the university
• Unjustified prolonged absence from the job
• Conduct that would result in termination for other university employees.
Another provision will define what happens if the university terminates you without cause, which involves the liquidated damages provision. A reasonable place to start these negotiations is to require the institution to pay your salary for the remaining period of the contract. However, if the amount of bonuses and supplemental compensation called for in the contract is large, it is reasonable to ask for liquidated damages at an amount equivalent to what you expect to earn in total compensation.
An important element to keep in mind is whether the institution will continue to pay your health benefits during the payout period. Also, be sure to clarify whether any club memberships or other perks will be paid for by the institution during this time.
Most institutions will want you to agree to a mitigation clause, which would entitle the school to an offset against the amount owed to you should you get another job or earn money as a consultant during the term of the liquidated damages payout. This is fair, but youíll want to discuss it up front. You should also negotiate whether you want the liquidated damages amount to be paid in one lump sum, periodic payments, or normal monthly installments as though you were still employed.
Another area to negotiate is your right to terminate the contract. This will require determining what type of notice you must give to the institution and what liquidated damages you will owe the university. Often, the amount agreed upon as liquidated damages is reciprocal on both parties no matter who ends the contract early.
An additional common provision requires the athletic director to receive permission before discussing employment at another institution. This should not be taken lightly, as its violation may result in higher liquidated damages or even an injunction prohibiting you from working for another institution.
Finally, have your attorney look over the agreement and ask if the institution's attorney will be available to discuss specific language with your attorney. Sometimes it is easier to have the attorneys negotiate some of the details.
ON THE RIGHT FOOT
Especially when you are starting a new position, contract negotiations can seem like a burden getting in the way of your dream job. But it is important that you take the time to work through them and get yourself the best compensation package possible.
In fact, there is no better time to ensure that you will be treated fairly in all respects than at the outset of the relationship. Take the opportunity to negotiate a fair contract that protects you so you can then concentrate your time and effort on moving the athletic program forward.
Sidebar: BONUS ROUND
More and more contracts between athletic directors and their institutions now include incentive clauses. At right, we list a sampling of a few gathered from public sources.
At the University of Missouri, Athletic Director Mike Alden receives additional compensation based on the success of the men's basketball team in the NCAA Division I tournament:
• $15,000 if the team appears in the tournament
• $15,000 if the team appears in the Sweet Sixteen
• Two months of additional salary if the team makes it to the Final Four
• $60,000 if the squad wins the national championship.
At the University of North Carolina, Athletic Director Dick Baddour receives one month's salary as a bonus if the football team is invited to a bowl game or the baseball, men's basketball, or women's basketball team is invited to the NCAA Division I tournament. He receives the same amount if:
• The average of the four-year Academic Progress Rates for the university's 28 varsity sports teams equals or exceeds 970
• UNC ranks in the top 10 of the final Directors' Cup standings.
At Kansas State University, Athletic Director John Currie receives a bonus for athletic-related accomplishments when his coaches do. The amount is:
• 75 percent of the bonus paid to the head coach.
• With the total amount for one year capped at 25 percent of Currie's annual base salary.
At Arizona State University, Athletic Director Lisa Love signed a new contract this winter with several incentive clauses that cover both academics and athletics. The total is capped, however, at 50 percent of Love's salary. She receives:
• One week of salary if the graduation rate of scholarship student-athletes is five percent higher than the general university rate, two weeks of salary if the rate is 10 percent higher, three weeks for 15 percent, and four weeks for 20 percent.
• Two weeks of salary for each postseason appearance by a team sport and another two weeks of salary for a national championship. For the football squad, the two weeks of salary is awarded if the football team appears in a bowl game, with the incentive increasing to three weeks of salary for a BCS game.
• One week of salary when a student-athlete in an individual sport places in the top five at the NCAA championships, and two weeks of salary if the athlete is a national champion.
For a look at the full list of incentives in these athletic directors' contracts, search "incentive clauses" at: www.AthleticManagement.com.