Understanding Chad Morris' buyout

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FAYETTEVILLE — With uncertainty and speculation swirling about Chad Morris’ job security, his buyout has become a topic of conversation across the fan base.

Because of the complicated language in coaching contracts, it almost requires a law degree to understand them. That has led to confusion and various different numbers being thrown around as Morris’ buyout if the Razorbacks decide to move on, so HawgBeat decided to take a look and clear things up.

The most important thing to note about Morris’ buyout - what Arkansas would owe him if it fires him, or “termination for convenience” in legal terms - is that it doesn’t have any magical dates on which it decreases by a significant amount.

Instead, if fired prior to Jan. 1, 2023, his buyout is 70 percent of his remaining salary and prorated based on the date of termination. In layman’s terms, it is less tomorrow than it is today.

(If fired Jan. 1, 2023, or after, Morris is due 100 percent of his remaining salary in the contract, which runs through Dec. 31 of that year.)

The confusion likely stems from the chart included in Morris’ original offer letter, which was as follows:

Morris’ official employment agreement, though, features the 70 percent buyout stipulation.

It includes the example of Jan. 1, 2020, as a termination date. At that point, he would have exactly four years and - with an annual salary of $3.5 million - $14 million remaining on his contract. The UA would owe him $9.8 million, which is 70 percent of that total and what is shown in that chart.

(NOTE: USA Today’s database of coach salaries lists Morris’ total pay for 2019 as $4 million, but that includes a $500,000 retention bonus he received Feb. 15 for simply still being employed. He is scheduled to receive another one on that date in 2021 and 2023. The retention bonus is not factored into the buyout calculations.)

However, if fired before Jan. 1, the UA would not owe $12.25 million as the chart seems to indicate. That is because the calendar year is nearly complete.

Each month on the job, Morris’ buyout drops by about $204,167 - or 70 percent of one month’s salary. That is how USA Today came up with its $10,004,167 number for his buyout on Dec. 1.

Likewise, his buyout would not be an additional $204,167 if fired this month. Instead, each day he remains on the job in November, it drops by $6,806.

For example, the difference in his buyout if fired immediately following Saturday’s game against Western Kentucky and immediately following the season-finale against Missouri on Nov. 29 is $136,111.

Morris would be owed roughly $10.02 million if he meets the same fate as previous head coach Bret Bielema, who was relieved of his duties just minutes following a loss to the Tigers on Black Friday.

In fact, the way Morris’ buyout is structured, it would actually be cheaper for Arkansas to fire him sooner rather than later because it would begin paying him 70 percent of his salary the moment it pulls the trigger rather than the full 100 percent.

Using the above example, Arkansas would owe Morris about $136,111 in buyout money between the Western Kentucky and Missouri games if he gets fired Saturday. If he remains employed, that 20-day period would earn him $194,444. The difference is $58,333.

Another important thing to note about Morris’ buyout is that it’s paid in equal monthly sums on the last day of each month over the remaining term of the contract - so through Dec. 31, 2023. It is not a lump sum, like the more than $10 million Kevin Sumlin received when fired at Texas A&M two years ago.

There is also an “offset” clause in Morris’ contract, meaning those monthly payments can be reduced if he finds another job within the timeframe of the buyout.

That clause specifically says he has an “obligation to maximize his earning potential with a new employer by seeking comparable employment for his services at a rate of compensation not less than market value and consistent with compensation rates for similar positions in the given industry at the time such employment is obtained.”

What that basically means is that Morris can’t just sit at home and collect checks or take another job with a discounted salary and use the buyout to subsidize his income.

According to the Arkansas Democrat-Gazette, that has become a point of contention with Bielema. The Razorback Foundation, which is paying his $11.935 million buyout, believes the former UA coach did not actively pursue other jobs and is now coaching the New England Patriots’ defensive line for way under market value.

In response, according to the Democrat-Gazette, the Foundation has stopped making its $320,833.33 monthly payments and is asking Bielema to repay the $4.2 million he’s already received.

This wasn’t an issue for former athletics director Jeff Long. He was set to receive a $4.625 million buyout, but saw only about 15 percent of that - or $708,333 - before being hired for the same position at Kansas last summer.