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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 MLP or Cy Young Award;
$1.75M if player finished 2nd in MVP or Cy Young Award;
$1.5M if player finishes 3rd in MVP or Cy Young Award voting;
$1M if player finshes 4th or 5th in MVP or Cy Young Award voting;
$750K if player wins Rookie of the Year
$500K if player finished 2nd in Rookie of the Year voting.
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.
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 as selected by the MLB and MLBPA (method/criteria TBD).