Schmuck: Why incentive clauses don't always work in favor of the team

New Orioles pitcher Andrew Cashner received a two-year contract that reportedly includes an option for a third year and a long list of incentives that could boost his $8 million annual salary by as much as $5 million per season.

Teams certainly prefer that kind of arrangement to a much higher guarantee, but the popular notion that the team always benefits when the player reaches those incentive levels is not always supported by the evidence.

Cashner can earn a bonus for each of nine innings plateaus, starting at 110 and capping at 200. He also can get paid extra when he reaches 10 starts, 15 starts, 20 starts and 30 starts. Those bonuses range from a minimum of $250,000 ot a maximum of $750,000.

Since baseball contracts cannot include performance standards, he gets paid for reaching any or all of those levels regardless of how well he pitches.

For the most part, that insures the team against injuries and poor performance, but not always.

For example, if Ubaldo Jimenez had signed a four-year, $40 million contract with the same incentives as Cashner instead of the $50 million deal that was fully guaranteed, he would have made more money with the Cashner-type deal.

Yes, really.

Even though he had a combined 5.22 ERA and a 32-42 record, he would have added $10.725 million by reaching many of those inning and start plateaus. In his only winning season (12-10, 4.11 ERA) he would have gotten $4.2 million in bonuses.

Don’t worry too much about this. Cashner isn’t likely to replicate Ubaldo’s numbers. In fact, he has had only one season in his eight-year career in which he had an ERA (5.25) similar to the combined 5.22 ERA Jimenez compiled during his entire Orioles career.

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