Matthew Mitchell, the Southeastern Conference's coach of the year, is going from one of the league's lowest-paid coaches to one of its highest paid.
Kentucky announced the new contract Thursday afternoon. It will pay Mitchell an average of $600,000 over the next five years.
When Mitchell was hired in 2007, he was given a deal worth $150,000 annually with $100,000 in endorsements and other incentives.
Athletics Director Mitch Barnhart approached the 39-year-old head coach about putting together a new deal at the NCAA Tournament in March, Mitchell said.
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The new contract, which was signed in September, has multiple performance-based incentives and roll-over clauses.
It was designed with one thing in mind, the coach said.
"I'd love to signal to our fans, to recruits, to everyone in this community that we're a part of this community and we want to be here, and we love Kentucky," Mitchell said from his office Thursday night.
One part of the contract stipulates that if UK qualifies for a Final Four, Mitchell will receive a performance bonus of $80,000 and his contract will go from a rolling five-year deal to a rolling eight-year deal.
In addition, his base salary would increase to $300,000 a year and his broadcasting and endorsements compensation would increase to $550,000.
In the next clause, if UK gets to two Final Fours, Mitchell's contract would become a rolling 10-year deal worth $400,000 base with an additional $650,000 in broadcasting and endorsement compensation.
"I wanted to take the approach that if we achieved certain things then we'd be compensated," Mitchell explained, calling the negotiations a smooth process. "I think it's a good way to do business.
"If we do really well, we're going to be compensated really well and if we do reasonably well, we're going to be compensated reasonably well."
The contract was made retroactive to April 22. The university didn't release details of it until Thursday, following an open records request by the Herald-Leader.
Mitchell said the negotiations didn't start until after a busy summer of recruiting and travel with his wife, Jenna.
In the release, Barnhart said he was excited to have the new deal in place.
"He has done a remarkable job in creating a culture of passion and competitiveness with a type of class that makes us proud to have him at the University of Kentucky," Barnhart said.
Mitchell's new deal came after he led Kentucky to its first-ever NCAA Tournament Elite Eight appearance last season.
It was a season in which UK had the most wins in program history, a school-best 11 SEC victories and the highest league finish (second) in 28 years.
Mitchell's new compensation package takes him from one of the lowest-paid coaches in the SEC to its upper echelon.
According to previously published reports, Tennessee's Pat Summitt makes $1.5 million a year, followed by South Carolina's Dawn Staley, who totals out at $650,000.
Other reported total compensation for SEC coaches includes $570,000 a year for Auburn's Nell Fortner; $560,000 annually for LSU's Van Chancellor (which bumps to $710,000 a year this season) and $525,000 a year for Georgia's Andy Landers.
If UK fires Mitchell without cause, it agrees to pay him half of his compensation for the remainder of the contract.
If Mitchell leaves before the contract expires, he will pay UK on a sliding scale, which starts at $250,000 this year and decreases annually.
Mitchell said he is happy to call UK home for years to come.
"My main goal is to stay here," he said. "I can't think of a better situation. Jenna and I love this community, this city. The people here have been so great to us. It's our home. Nothing would make me happier than staying here a long, long time."