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If we got to a point in our search where’s it was time to talk compensation and approached high level candidates with a “take it or leave it” offer we deserve to fold.
Incentives are fine for the right items, and should be expected; but they should also be attainable. I want to say Harbaugh's contract is pretty heavily incentivized with winning the division and conference. That's where you should be earning your big bonuses, because they're harder to attain.
Regarding compensation overall, I'd agree. You have to make your guy say no - within reason. But it'd be scary if we were nickel and diming a proven coach, and trying to make him earn most of it through something that's borderline unattainable on a consistent basis.