Erik ten Hag will face a 25% pay cut as Manchester United manager next season if he holds onto his job in the wake of the failure to qualify for the Champions League, sources have told ESPN.

Ten Hag, who signed a three-year contract at Old Trafford after leaving his position as Ajax head coach in May 2022, is under mounting pressure at United with the team in seventh position in the Premier League, 16 points adrift of a top-four spot, ahead of Wednesday's Old Trafford clash with bottom-placed Sheffield United.

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Although United secured a place in the FA Cup final for the second successive season by defeating Championship side Coventry City on penalties last weekend, the manner of the team's progression -- United surrendered a 3-0 lead by conceding three goals in the final 20 minutes at Wembley -- has further intensified the scrutiny on Ten Hag.

Sources have told ESPN that United's new football regime, headed by minority owner Sir Jim Ratcliffe, have been exploring possible alternatives to Ten Hag by assessing the qualities of other managers including England's Gareth Southgate, Brighton manager Roberto De Zerbi, Brentford's Thomas Frank and Wolves' Gary O'Neil.

But despite the poor performances and exit from this season's Champions League at the group stage, sources have told ESPN that United are still, at this stage, preparing for next season with Ten Hag as manager.

Sources have told ESPN that the 54-year-old, like the vast majority of his senior players, is on an incentivised contract at Old Trafford related to the team's performances and that failure to secure Champions League qualification would trigger a 25% cut in salary for the season in which the team does not participate in UEFA's premier competition.

With Ten Hag earning 9 million-a-year ($11.2m) as United manager, an absence from next season's Champions League would see his salary drop to 6.75m and potentially open up the prospect of a less lucrative compensation package should a decision be made to dismiss him as manager with one year remaining on his contract this summer.

With 18 points still to play for this season, United are not mathematically out of the race to finish in the top four and qualify for the Champions League.

But with Aston Villa 16 points clear of United, and also boasting a significantly superior goal difference, a failure to win against Sheffield United on Wednesday would end United's faint Champions League hopes and confirm the 25% salary cut going into next season.