Roles of Performance and Human Capital in College Football Coaches’ Compensation

Abstract

Despite the escalation of football coaches’ salaries at National Collegiate Athletic Association (NCAA) Football Bowl Subdivision (FBS) institutions, little empirical investigation has been undertaken to identify the determinants of their compensation. As such, the purpose of this study is to explain how the level of coaching compensation is determined based on three theoretical perspectives in managerial compensation: marginal productivity theory, human capital theory, and managerialism. The analysis of compensation data of head football coaches at FBS institutions in 2006–2007 shows that the maximum total compensation of these coaches increases with their past performance. The results further reveal that coaches with greater human capital tend to receive a compensation package where bonuses account for a smaller proportion of the maximum total compensation. Overall, these findings mostly confirm the predictions drawn from managerial productivity theory, human capital theory and managerialism.

Strategic steps for Nigerian hospitality human capital development

“…Government-educated persons had an IRR from 12.2 to 14 percent while uneducated persons had a IRR ranging from 8.4 to 9.8 percent (Tamasauskiene and Poteliene, 2013). The maximum IRR achieved by an uneducated person was below the minimum realized by the educated, which supported the notion that education plays a role in wage differentials (Inoue et al, 2013;Tamasauskiene and Poteliene, 2013).…”

“…Other authors also contributed to the argument that there is a positive relationship between HC and total compensation. Inoue et al (2013) concurred but added that the relationship was an inverse proportion with increasing bonus. Tamasauskiene and Poteliene (2013) evaluated the IRR on HCD in Lithuania compared with other countries and determined that persons who benefited from a government education subsidy have a higher IRR.…”

“…Employees with high HC could influence their organization to receive high compensation based on their past performance. An example was the pay levels achieved by college football coaches during the global financial crisis (Inoue et al, 2013).…”

“…Strategic steps for Nigerian hospitality HCD and is the utmost investment in a human being (Sweetland, 1996). As well, many researchers have applied the theory as the foundation for discussions on wage inequalities and organizational productivity (Chen, 2013;Huffman, 2013;Inoue et al, 2013).…”

A Comparison of NCAA FBS Head Coaches Salary Determination From New and Modified Contracts

“…Farmer and Pecorino (2010) provide a theoretical model of NCAA head coaching salary under both competitive and cartel conditions. Inoue et al (2012) investigate all NCAA football head coaches' salary over the 2006 and 2007 football seasons by using as the dependent variable maximum total compensation, which includes the maximum possible bonus allowed under their contract which will be more than most-if not all-coaches actually receive, and for coaches both those under new and amended contracts and those beyond the 1st year of a multi-year contract. Additionally, the author's only market variable is stadium capacity (measured in natural logs).…”