Roles of performance and human capital in college football coaches' compensation

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.