The contract will pay Shula $1.55 million annually through January 31, 2012. It also includes a one-time signing bonus of $200,000.
A deferred compensation plan of $200,000 per year for the six year contract period has also been added, money that would be paid at the conclusion of the contract, raising the total base value of the contract to $1.75 million.
The University of Alabama Board of Trustees Compensation Committee unanimously approved the new contract on Wednesday. This new agreement moves Shula's compensation into the upper third of football coaches within the Southeastern Conference.
Shula's new contract reflects an increase from $150,000 to $200,000 in his base salary and a jump from $750,000 to $1.35 million in talent fees, which are paid by the team's media rights holder.
"With our new facilities and support areas, our future is very bright," Shula said in a press release sent out by the University. "Coach Moore has done an outstanding job of pulling it all together."
Shula, who is 40 years old, has posted a 20-17 overall record at Alabama, going 4-9 in 2003, 6-6 in 2004 and 10-2 last year.
He has taken the Tide to back-to-back bowl games, winning the 2006 AT&T Cotton Bowl Classic 13-10 over Texas Tech, and finishing ranked eighth in the country.
"Mike has brought stability and continuity to a program that needed it," Moore said in the University press release.