Harbaugh Split Dollar Agreement

The Harbaugh Split Dollar Agreement: What You Need to Know

When it comes to high-profile sports coaches, the contracts they sign are often shrouded in secrecy. However, in the case of Jim Harbaugh, head football coach at the University of Michigan, details of his contract have recently come to light. One interesting aspect of his compensation package is something known as a split dollar agreement.

What is a split dollar agreement?

A split dollar agreement is a type of executive compensation plan in which two parties split the premium payments and death benefit of a life insurance policy. Typically, an employer and employee enter into a split dollar agreement to fund an employee’s life insurance policy as an additional benefit. The employer pays a portion of the premium, and the employee pays the remaining premium, but the death benefit is split between them.

The Harbaugh Split Dollar Agreement

In the case of Jim Harbaugh, his split dollar agreement involves the University of Michigan and a California-based company called Life Insurance Strategies Group (LISG). According to public records, the University of Michigan has agreed to pay premiums of $2 million per year on a life insurance policy worth $10 million. However, this policy is owned by LISG, not the university.

Under the terms of the agreement, LISG will receive the first $2 million of the death benefit upon Harbaugh’s passing, in exchange for paying upfront the cost of the policy’s premiums. The university will receive the remaining $8 million of the death benefit.

Why did Harbaugh enter into this agreement?

The primary reason for entering into a split dollar agreement is to mitigate the tax burden on the employee. In Harbaugh’s case, the University of Michigan is paying for the premiums, which means Harbaugh is not taxed on that portion of his compensation. Additionally, the life insurance policy provides a tax-free death benefit to his family in the event of his passing.

It’s worth noting that split dollar agreements have fallen out of favor in recent years due to changes in tax laws and accounting rules. However, they can still be a useful tool for certain types of executive compensation packages.

In conclusion, the Harbaugh split dollar agreement is an interesting example of how executive compensation can take many forms, and how some of these forms are not always immediately apparent. As always, it’s important to understand what you’re signing up for when it comes to employment contracts, especially when it comes to high-profile positions like college football coaches.


Popular Posts

  • Service Level Agreement Monitoring and Reporting Template

    As businesses strive to maintain optimal performance, it is essential to have a reliable service level agreement (SLA) monitoring and reporting template. This template is essential for tracking the performance of a company`s service providers against the agreed-upon service level agreements. In this article, we will discuss the importance of an SLA monitoring and reporting…

  • Contract Agreement Signature Page

    A contract agreement signature page is a crucial aspect of any legally binding document. This page is usually the last page of a contract and contains the signatures of all parties involved in the agreement. The signature page is designed to ensure that all parties understand and agree to the terms of the contract. It…

  • Lease Agreement Il

    When it comes to leasing a property, having a thorough and well-written lease agreement is crucial for both the landlord and tenant. A lease agreement serves as a legal contract between the two parties outlining the terms and conditions of the lease. In Illinois, lease agreements are governed by state laws and should adhere to…



There’s no content to show here yet.