Performance-Incentive Bonuses

Performance-Incentive Bonuses

Performance-incentive bonuses are permitted in Major League contracts, but a bonus cannot be based on batting or pitching skill, or where the club finishes in the standings.

A performance-incentive bonus can, however, be tied to days spent on an MLB Active List during the MLB regular season, and/or Games Played, Games Started, Games Finished, and/or Innings Pitched for pitchers, or Games Played, Games Started, and/or Plate Appearances for position players. Awards such as MVP, Cy Young, Silver Slugger, and/or Gold Glove, and/or being named to an All-Star team, can also be tied to an incentive bonus. 


Beginning in 2022, there will be a $50M pool established by MLB clubs each season to provide bonuses for pre-arbitration (auto-renewal) players: 

$2.5M if player wins MVP or Cy Young Award;
$1.75M if player finishes 2nd in MVP or Cy Young Award; 
$1.5M if player finishes 3rd in MVP or Cy Young Award voting; 
$1M if player finishes 4th or 5th in MVP or Cy Young Award voting; 
$750K if player wins Rookie of the Year;
$500K if player finishes 2nd in Rookie of the Year voting; 
$1M if player is named to All-MLB 1st team; 
$500K if player is named to All-MLB 2nd team.
NOTE: A player can only receive one bonus per season. If a player is eligible for more than one bonus in a given season, he will receive the highest bonus.

Each MLB club will contribute $1.67M to the bonus pool each season, and the money contributed to the bonus pool counts against a club's Competitive Balance Tax (CBT) liability, no matter how many of the club's players might have received a bonus, and/or if none of the club's players received a bonus.

Any amount of the $50M in bonus money not automatically awarded to players in a season will be distributed to the Top 100 pre-arbitration players based on a player's WAR as determined jointly by MLB & MLBPA.     

Arizona Phil