The four-year contract was settled after seven hours of talks between Ferguson, his advisers and the remuneration committee of Manchester United plc. It involves a measure of compromise on both sides, particularly by Ferguson, who was seeking a six-year contract which would have kept him at the club until he was 60. The club had offered three years but increased it after Ferguson hinted at resignation.
"It is not a problem," Ferguson said last night. "Six years was a long contract. I can understand that. Four years is still a good, healthy contract. It takes me to 58, and there are a lot of things I can still do at that age. Sixty is more of a landmark, a watershed. At 58, I might feel like another four years and want to re-negotiate again."
The agreement makes Ferguson the highest paid manager in England and one of the best remunerated in the world. The double Double-winner will be paid an annual basic salary of around pounds 500,000, twice his current basic. This could double again with bonuses and, even in a relatively poor year, should reach pounds 700,000 as the bonuses start with simply keeping United in the Premiership.
In the past Ferguson has felt undervalued compared with managers such as Kenny Dalglish, Howard Wilkinson and George Graham but this deal would put him on a par with his counterparts across Europe, such as Fabio Capello, the Milan coach who has agreed to join Real Madrid.
He has also felt underpaid compared with others in Manchester United plc. While Ferguson is not involved in the successful selling of the club, he is the one who has rebuilt it. In his nine and a half years at Old Trafford United have ended 26 years of fruitless championship-chasing with three titles in five seasons. They have also won three FA Cups, a League Cup, a European trophy and built a youth system which is the envy of the country.
Now his own future is settled Ferguson can resume planning for next season's assault on the lucrative Champions' League. The first step remains the signing of Alan Shearer, despite contrasting denials yesterday by both the player and Blackburn Rovers, his current club.
Speaking at England's Bisham Abbey training camp, Shearer said he knew nothing of the transfer and said his agent, Tony Stephens, had not been in touch with United.
Shearer, who has previously been sparing in his praise for United, then went on to say: "I am very flattered to be linked with such a great team as Manchester United, who have done so well over the last few years." He added: "I am contracted to Blackburn. I signed an extension last year and have three years still to go."
Robert Coar, the chairman of Blackburn, was far more forthright. "These are stories without foundation," he said. "The reports are completely and utterly untrue."
FOOTBALL'S BIG EARNERS
Managers (excluding Alex Ferguson)
1 Ruud Gullit (Chelsea) pounds 1.2m
2 Kevin Keegan (N'castle) pounds 450,000
3 Bryan Robson (M'boro) pounds 400,000
4 Ray Wilkins (QPR) pounds 350,000
1 Dennis Bergkamp (Arsenal) pounds 1.1m
2 Eric Cantona (Man Utd) pounds 1m*
3 Alan Shearer (Blackburn) pounds 800,000
4 Stan Collymore (L'pool) pounds 750,000
5 Chris Sutton (Blackburn) pounds 720,000
* with bonuses (figures show annual salary)Reuse content