DOTM (Definition of the Month)

NFL Performance Based Pay System

Performance-based pay was created as part of the NFL’s 2002 Collective Bargaining Agreement Extension with the NFL Players Association. Under this system, a fund is setup to supplement player compensation based on a comparison of playing time to their salary, thus alleviating some of the disparity for players whose playing time is disproportionate to their compensation. These payouts do not count towards a team’s salary cap.

Players become eligible to receive performance-based pay in any regular season in which they play at least one official down. Under the system, performance-based pay is computed by using a “Player Index.” To produce a player’s index, a player’s regular-season playing time; total number of plays on offense, defense, and special teams is then divided by his adjusted regular-season compensation; to include full-season salary, prorated portion of signing bonus, and earned incentives. Each player’s index is then compared to those of the other players on his team to determine the amount of his pay.

Last year, nearly $99 million was distributed to players in performance-based pay for the 2007 season. That year, the highest payment was $309,534, earned by Pittsburgh Steelers offensive tackle Wille Colon. Approximately $105 million was distributed to players in the system for their performance during the 2008 playing season with the highest payout of $405,859 going to yet another offensive tackle, San Diego Chargers 2006 6th Round draft pick Jeromey Clary.

The top performance based payouts for the 2008 season:

Jeromey Clary, Chargers OT, $405,859
Lyle Sendlein, Cardinals C, $348,134
Chris Horton, Redskins SS, $342,197
Carl Nicks, Saints G, $335,033
Brandon McDonald, Browns CB, $329,803
Uche Nwaneri, Jaguars G, $323,788
Michael Johnson, Giants FS, $315,650
Charles Godfrey, Panthers FS, $311,294
Darnell Stapleton, Steelers G, $311,220
Donald Penn, Buccaneers OT, $310,919

In 2009, the performance-based pay fund will be approximately $3.5 million per team, which is a 5 percent increase over the 2008 fund. This program will stay in place through the remaining years of the CBA in which a salary cap exists.