Michigan coach Jim Harbaugh has agreed to a new five-year, $36.7 million contract with the Wolverines after flirting with the NFL over the offseason. The new deal marks Harbaugh's return as one of the highest-paid coaches in college football. His annual compensation starts at $7.05 million in 2022 and goes up steadily to $7.63 million in 2026. In all, it's more than a $3 million increase from his 2021 base salary. 

"I love Michigan Football, the University of Michigan and the Ann Arbor community," said Harbaugh in a statement. "My family and I are excited to continue leading this football program, and we are thankful for the support that our athletic department and university administration have demonstrated toward the team."

The new deal includes multiple incentives. A national title will pay Harbaugh $1 million, as will a Big Ten championship. An appearance in a national semifinal and a Big Ten East title will net $500,000 each, and a New Year's Six appearance (without a division title) will send $200,000 Harbaugh's way. Harbaugh will earn $50,000 if he is named Big Ten Coach of the Year by the conference's coaches and another $75,000 if he is named one of the national coach of the year by one of the major voting organizations. 

Harbaugh led Michigan to its first Big Ten championship since 2004 and an appearance in the College Football Playoff last season, where it lost 34-11 to eventual national champion Georgia. The Wolverines also topped rival Ohio State for the first time since 2011, while defensive end Aidan Hutchinson was named a Heisman finalist following a breakout season. 

But Harbaugh made waves by interviewing for the Minnesota Vikings job on National Signing Day, the uncertainty of which led to offensive coordinator Josh Gattis and defensive coordinator Mike Macdonald leaving for new jobs with the Miami Hurricanes and Baltimore Ravens, respectively. Harbaugh promoted internally for co-offensive coordinators and hired Vanderbilt DC Jesse Minter to the same position. Harbaugh reportedly told Michigan brass that his flirtation with the NFL was a one-time event.

"Jim has done a great job coaching and developing the young men in our football program," said Michigan athletic director Warde Manuel. "Last season, Jim, along with the staff and players, delivered a memorable season that will remain with all of us for a long time. As Coach said, this is just the beginning. Academically, our program has been one of the best in the Big Ten and among the leaders across the country. We have graduated our players and they have been young men of great character who have done the right things. I have the utmost confidence in the direction of the program under Jim's leadership."

Following a disappointing 2020 season, Harbaugh agreed to a four-year, incentive-laden extension that notably included a major reduction in his base pay, taking him from one of the highest-paid coaches in college football to a salary of about $4 million. In response, he earned more than $2 million in incentives for winning the Big Ten and making a CFP appearance -- which he donated to Michigan athletic department employees who took pay cuts amid the COVID-19 pandemic. 

There's little question that the success of the 2021 season, coupled with Harbaugh's near departure for the NFL, has pushed him back into the top tier of coaching salaries. With incentives, his new deal effectively puts him back at the level of earnings he made before taking a pay cut.