LONDON • Louis van Gaal will lose out on more than £1 million (S$1.97 million) of his annual salary at Manchester United if his side fail to qualify for next season's Champions League.

The Times of London has reported that more than half of the Dutch manager's £8 million annual package is based on a series of performance-related, loyalty- and image-rights clauses.

For example, he will get a £400,000 bonus if United win the FA Cup, and a £5 million pay-off if he is sacked at the end of the season.

Of the £8 million-a-year contract he signed in May 2014, only £3.3 million is guaranteed as basic pay.

The rest of the package is made up of £2 million in loyalty payment, £1.6 million for image rights and £1.1 million for taking United into the Champions League.

All those sums were paid last year after United finished fourth in van Gaal's first season at Old Trafford, but the Champions League payment is in jeopardy this season because his side are fifth in the Premier League, four points behind fourth-placed Manchester City but with a game in hand.

In addition to his salary, he can earn a series of payments based on the team's performance, although only the FA Cup-winning bonus remains in play this season, with United meeting Crystal Palace at Wembley on May 22. There is no bonus for reaching the final.

A further indication of the dim view United will take of failing to qualify for the Champions League is found in the fact that winning the Europa League would earn him £400,000, the same as winning the FA Cup, although there is a £200,000 bonus payment should he reach the final of the secondary European competition.

Van Gaal has already missed out on trophy bonuses of £1.5 million each for the Champions League and the Premier League - finishing second in either competition would have earned him £750,000 - and £200,000 for the League Cup.

The Times has also learnt the details of the Dutchman's payoff should he be sacked at the end of the season, which remains the expectation despite his defiance last week when he insisted that he would see out the final year of his three-year contract.

If he is sacked, United will continue to pay him two-thirds of his salary - including the loyalty and image-rights elements - on a monthly basis, so it will cost them approximately £5 million to dismiss him.

The financial cost of sacking him is not thought to be a factor as the club consider his future.

While his success in bringing talented youngsters such as Marcus Rashford and Timothy Fosu-Mensah into the first team counts in his favour, there remain concerns over his style of football and a dictatorial approach that has alienated senior players.

Former Chelsea boss Jose Mourinho has made it clear that he wants the United job, but the club will not be forced into making such an appointment.

The Portuguese would demand wages of between £10 million and £12 million a year and it is unclear whether he would accept the salary structure agreed by van Gaal.

THE TIMES, LONDON