David Ortiz’s contract extension — in addition to covering the 2015 season — includes options for the 2016 and 2017 seasons.
Ortiz, who currently is in the midst of a two-year contract he signed last offseason, will earn $15 million in 2014 as part of his current deal. The slugger’s extension, which the Boston Red Sox announced Monday, will pay Ortiz $16 million in 2015.
The options are where things get a little trickier.
Ortiz’s 2016 option starts as a $10 million club option. The 2016 option will vest and be worth $11 million guaranteed if Ortiz reaches 425 plate appearances in 2015. Ortiz can earn a maximum of $16 million in 2016 based on the number of plate appearances he garners in 2015.
Below is a breakdown of how Ortiz’s 2016 option is structured based on his number of plate appearances in 2015.
425 plate appearances: $11 million
475 plate appearances: $12 million
525 plate appearances: $13 million
550 plate appearances: $14 million
575 plate appearances: $15 million
600 plate appearances: $16 million
Ortiz’s 2017 option is strictly a club option, meaning it won’t vest based on any specific accomplishments. The value of the club option, however, will increase based on the same structure as the 2016 option. For example, if Ortiz finishes 2016 with 525 plate appearances, the Red Sox will need to pay him $13 million for 2017 if they decide to exercise his 2017 option.
Ortiz’s current deal started as a two-year, $26 million pact when signed last offseason, but his original $11 million salary for 2014 increased to $15 million because he spent fewer than 20 days on the disabled list in 2013.
Basically, the use of such incentives ensures that Ortiz’s annual compensation is tied to his health and productivity.
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