High Impact Incentives
This analysis highlights high impact incentive structures, using a definition of ‘high impact’ under which the maximum incentive payout is equal to or greater than 25% of the guaranteed money in the contract. Using this definition, high impact incentive structures come in two areas of the player market. First, one-year contracts frequently contain high impact incentives, sometimes exceeding the guaranteed money under the contract. Second, long-term contracts for arbitration-eligible and pre-arbitration players often contain high impact incentive structures, although there are significant contingencies in these contracts which make it difficult to assess the actual materiality of the incentive structures. Beyond these two areas, incentives are generally an insignificant part of a player’s total possible compensation.
Note that, as discussed on the analysis of Options and Incentives, incentives that trigger option rights, such as a vesting player option, may end up being quite impactful to the total contract, but it is difficult to assess the impact of these clauses at the outset of the contract given the contingencies associated with whether the option will be triggered and whether the team or player will exercise an option.
1. One-Year Contracts
One-year contracts are the hotbed of high impact incentives. The chart below displays all one-year contracts from the 2025 and 2026 season which contain/contained maximum incentive payouts that were at least 25% of the guaranteed money. These incentive-heavy contracts are for both position players and pitchers, and, although the most common structure is for performance incentives, there are also some contracts which contained award incentives and roster bonuses.
As can be seen from the below, the majority of these contracts are for relatively small dollar value figures, but some, like the contracts of pitchers Jose Quintana, Clayton Kershaw, John Brebbia, Sean Newcomb, Tyler Mahle, and Michael Lorenzon and position players Jorge Polanco, Miguel Andujar, and Justin Turner, were multi-million dollar contracts with multi-million dollar incentives.
The most notable similarity between the players receiving these contracts is age. For example, the average age of the players below is 32.7, with 29 of the 37 players being 30 or older at the start of the contract season. This likely indicates teams’ concerns with paying guaranteed money for a player whose performance may decline due to age. Of the eight players younger than 30, one will be 27 at the start of the contract season (Melendez), four were/will be 28 at the start of the contract season (Rengifo, Luis Urias, Soroka, and Bleday), and two will be 29 at the start of the contract season (Weiss, Canning, and Diaz). There is also a trend towards using these contracts for pitchers with injury history. For example, Graveman, Raley, Kershaw, Dunning, Wilson, Blackburn, Martin, Soroka, and Harvey all had fairly significant injury histories in the years leading up to the year of these contracts.
For many of these contracts, all, or more commonly a portion, of the incentives were earned. For example:
Brooks Raley earned $800,000 of his potential $1.5 million by being on the active roster and pitching 25 innings.
Clayton Kershaw earned all $8.5 million of his incentives for being active more than 90 days and making 22 starts.
Jorge Polanco earned $2.5 million of his potential $3.5 million by making 524 plate appearances.
Jose Quintana earned $1.05 million of his $1.25 million potential incentives in the 2025 season by being on the active roster, making 24 starts, and pitching 131 innings.
Michael Lorenzen earned $1 million of his potential $2.75 million by making 27 appearance and pitching 141 innings.
Justin Wilson earned all of his $750,000 in incentives by making 61 appearances.
| Player | Position | Guaranteed Money ($M) | Max Incentive Payout ($M) | Max Incentive Payout/Guaranteed Money |
|---|---|---|---|---|
| Kendall Graveman | RP | 1.35 | 1.95 | 144.44% |
| Ramon Urias | IF | 2 | 2 | 100.00% |
| John Brebbia | RP | 2.75 | 2 | 72.72% |
| Luis Garcia | RP | 1.75 | 1.25 | 71.43% |
| Luis Urias | IF | 1.1 | 0.75 | 68.18% |
| Scott Barlow | RP | 2 | 1.3 | 65.00% |
| Jon Berti | IF | 2 | 1.3 | 65.00% |
| Brooks Raley | RP | 1.85 | 1.15 | 62.16% |
| Paul Dejong | IF | 1 | 0.6 | 60.00% |
| Griffin Canning | SP | 2.5 | 1.5 | 60.00% |
| Tyler Alexander | RP | 1 | 0.575 | 57.50% |
| Clayton Kershaw | SP | 16 | 8.5 | 53.13% |
| Alexis Diaz | RP | 1 | 0.5 | 50.00% |
| Miguel Andujar | OF | 4 | 2 | 50.00% |
| Sean Newcomb | SP/RP | 4.5 | 2.25 | 50.00% |
| Jorge Polanco | IF | 7.75 | 3.5 | 45.16% |
| JJ Bleday | OF | 1.4 | 0.6 | 42.86% |
| Luis Rengifo | IF | 3.5 | 1.5 | 42.86% |
| Michael Lorenzen | SP | 7 | 2.75 | 39.29% |
| Dane Dunning | RP | 2.6 | 0.985 | 37.88% |
| Jacob Webb | RP | 1.5 | 0.5 | 33.33% |
| MJ Melendez | OF | 1.5 | 0.5 | 33.33% |
| Justin Wilson | RP | 2.25 | 0.75 | 33.33% |
| Justin Turner | IF | 6 | 2 | 33.33% |
| Jose Quintana | SP | 4 | 1.25 | 31.25% |
| Kyle Farmer | IF | 3.25 | 1 | 30.77% |
| Austin Slater | OF | 1.75 | 0.5 | 28.57% |
| Donavon Solano | IF | 3.5 | 1 | 28.57% |
| Ryan Weiss | RP | 2.6 | 0.725 | 27.88% |
| Michael Soroka | SP | 7.5 | 2 | 26.67% |
| Tyler Mahle | SP | 10 | 2.65 | 26.50% |
| Jason Heyward | OF | 1 | 0.25 | 25.00% |
| Paul Blackburn | RP | 2 | 0.5 | 25.00% |
| Josh Rojas | IF | 3.5 | 0.875 | 25.00% |
| Chris Martin | RP | 4 | 1 | 25.00% |
| Hunter Harvey | RP | 6 | 1.5 | 25.00% |
2. Pre-Arbitration and Arbitration Multi-Year Contracts
Many of the multi-year extensions for pre-arbitration and arbitration-eligible players contain salary escalators with significant potential impact to the total compensation owed under the contract. These are surveyed more closely in the Top of the Market analysis, but it is easy to illustrate the point by focusing on the contract of OF Jackson Merrill. Merrill’s 9-year contract with the Padres, starting in 2026, contains a salary escalator under which all remaining salaries in Merrill’s deal increase by $1 million each time Merrill reaches 500 plate appearances. This incentive would be very significant in a hypothetical scenario where Merrill reaches 500 plate appearances in each year of the agreement. In this situation, Merrill would make an additional $36 million over the guaranteed term of his contract, over a 25% increase from the guaranteed $135 million in his contract.
The contracts of Sung Mun Song and Ketel Marte can also be included in this group, as they have high impact incentive structures with some contextual similarities to pre-arbitration or arbitration-eligible contracts. Song, like pre-arbitration and arbitration-eligible players, has very limited MLB experience (none in Song’s case), as he was signed as a foreign professional out of the Korean league. Song has a 4-year, $15 million contract with the Padres starting in the 2026 season. Song can increase his 2027 salary by $1 million if he wins Rookie of the Year in 2026, and can increase all subsequent salaries in the contract if he finishes top 5 in MVP voting. This creates the potential for him to increase the total value of his contract by greater than 25%.
Ketel Marte has more experience than the other players in this category, but, similarly to the pre-arbitration and arbitration-eligible players, has never tested free agency, instead repeatedly entering into contract extensions with the Diamondbacks. Marte can significantly increase the value of his 6-year contract with the Diamondbacks based on salary escalators from plate appearances and MVP voting. These salary escalators can increase his yearly salary by a maximum of $5.5 million, which is just over 25% of his average annual salary of 19.42 million.