Both UA basketball coach Sean Miller and AD Greg Byrne will be able to cash out of their multimillion dollar booster-funded retention plans two years earlier if the Arizona Board of Regents approve their revised contracts next week.
The Regents voted in June 2014 to approve a plan that allowed Byrne, Miller and football coach Rich Rodriguez to begin vesting in their shares of a master limited partnership (signup may be required to read the details here)Β over an eight-year period through 2022.
Rodriguez and Miller were each allotted 175,000 shares, worth $6.19 million when the deal was outlined in May 2014, while Byrne had 100,000 shares set aside for an initial value of $3.54 million. (AsΒ of Thursday's market close,Β however, the coaches' packages are valued at $4.20 million each and Byrne's is worth $2.4 million because the MLP's share price has dropped 32 percent since the plan was drawn up in May 2014).
Rodriguez' retention plan was already shortened to six years at the June 2015 Regents meeting, though a similar deal for Miller was delayed by what Byrne then called a "technical issue" in the proposal.
The proposal initially to be submitted in June said Miller could collect his vested amount if he left UA "for any reason," and the new one (attached as a PDF) says he won't get anything if he "voluntarily terminates his employment or if he is terminated for cause for a reason other than disability or death" before 2020.
Miller can collect his vested amount before 2020, however, if he is fired without cause or leaves because of a "substantial physical or mental incapacity or death."
The revised deal also accelerates the vesting schedule for Byrne and Miller to where they will be two-thirds vested immediately upon approval of the deal and fully vested on June 1, 2017.
While the retention changes are favorable to both Byrne and Miller, there's a downside for UA in that 90 percent of the shares go out of the school's control two years earlier. The combined 500,000 MLP shares (50,000 are assigned at the school's discretion) are expected to spin off a significant six-figure amount of income each year that the school is allowed to keep, meaning UA could lose around $1 million over two years between 2020-2022.
Meanwhile, the proposal seeks to extend both Byrne and Miller's contracts for a year each through 2019-2020. Miller will receive a $100,000 raise for that year, while Byrne will be elevated by $50,000 to a total of $750,000.
Miller has $100,000 salary escalators in all but one season on his remaining contract. For this season, he is guaranteed $1.4 million in base pay from the UA, plus $700,000 for peripheral duties and about $400,000 total from Nike and IMG for a total package of $2.5 million plus bonuses. His total package would be $2.8 million plus bonuses in the final year of 2019-20.
Miller will also receive the full $2.1 million of another, university funded, retention plan if he stays through next spring. That fund allotted $300,000 for each year since Miller's arrival in 2009 if he stayed until 2016.
Byrne is scheduled to earn $650,000 for 2015-16 and the revised proposal to be voted on next Friday in FlagstaffΒ seeks to modify some of Byrne's incentives.
Instead of being rewarded for the student graduation rate in relation to the overall student graduation rate -- the proposal said there is "no valid comparative data" for general students -- Byrne can now earn a bonus based on UA's multi-year Academic Progress Rates.
If all UA teams have 950 or higher APRs, Byrne can earn a bonus of one week of his base pay ($12,500 this year). He'll get two weeks' bonus if the APRs are 975 or up and three weeks if they are all a perfect 1,000.
In addition, the proposal seeks to lower the bonus threshold for finishes in the Directors Cup, which measures all of a department's teams against the rest of Division I.
Byrne will get a bonus of one week's salary if UA finishes 16-25 (previously UA had to be in the 6-10 range), two weeks if it finishes 2-15 (previously 2-5) and four weeks bonus pay if UA finishes first. UA was 36th in the 2014-15 standings and 26th in 2013-14.
"The change is .. is to make this category more realistic given that UA competes against many programs located in larger markets and that have significantly greater resources," the proposal stated.
Proposals for both Miller and Byrne note that their compensation is paid entirely with funds generated by the athletic department.
