A Different Pay Scheme - By Flood1, Sportsman, and Paul

Sportsman, Paul and I had a conversation this weekend covering a wide range of subjects, but one subject that caught our attention once again was driver pay. In the States many motorsports pay "prize" money. This is the primary way that teams and drivers collect money from each race. The individual race promoters and their race sponsors put the prize money up and the payout is based on position. There are other race incentives such as bonus money for pole position, etc. There are also bonuses paid out at season's end for the overall top twenty and this money comes from the sanctioning bodies and is largely generated by television revenue.

The teams and drivers also collect money from individual team sponsors and driver sponsors. Branding on the cars, promotional activities, use of team and driver logos for adverts, etc. are all revenue sources. But a very large part of driver pay is performance based.

In F1, driver pay is based on contract value. The contract value is based on a driver's perceived worth to a team, but his actual pay is not tied directly to performance. His performance has more impact on future contract values and very little to do with his current pay packet. We were curious about how the drivers in F1 would have been paid if the packet was based simply on points earned.

The reported driver payout by teams in 2009 was $138.8 million USD. The number is not absolutely known, but has been reported in the press. The total number of points available this season was 643.5 (half points at Malaysia). If we devide the total driver contract amount by the points available we get the value of each point earned($209,479.40 per point) . The table below allocates those dollars to the drivers based of their point totals in 2009.

			Calculated	Reported	Calculated
	Driver	Pts.	Wages	Wages	Difference
1	Button	95	19,900,544	5,000,000	14,900,544
2	Vettel	84	17,596,270	6,000,000	11,596,270
3	Barrichello	77	16,129,915	1,500,000	14,629,915
4	Webber	69.5	14,558,819	5,500,000	9,058,819
5	Hamilton	49	10,264,491	18,000,000	-7,735,509
6	Räikkönen	48	10,055,012	45,000,000	34,944,988
7	Rosberg	34.5	7,227,040	8,500,000	-1,272,960
8	Trulli	32.5	6,808,081	6,500,000	308,081
9	Alonso	26	5,446,465	15,000,000	-9,553,535
10	Glock	24	5,027,506	2,000,000	3,027,506
11	Massa	22	4,608,547	8,000,000	-3,391,453
12	Kovalainen	22	4,608,547	3,500,000	1,108,547
13	Heidfeld	19	3,980,109	2,800,000	1,180,109
14	Kubica	17	3,561,150	4,500,000	-938,850
15	Fisichella	8	1,675,835	1,500,000	175,835
16	Buemi	6	1,256,876	1,500,000	-243,124
17	Sutil	5	1,047,397	0	1,047,397
18	Kobayashi	3	628,438	?	?
19	Bourdais	2	418,959	?	?
20	Nakajima	0	0	0	0
21	Piquet	0	0	?	?
22	Liuzzi	0	0	0	0
23	Grosjean	0	0	0	0
24	Alguersuari	0	0	?	?
25	Badoer	0	0	?	?
		643.5	134,800,000	134,800,000

Of course there is so much difference between teams and cars that this method is probably not workable, but the payout by FOM to the teams is based on a complicated formula that is performance based. It makes sense to me that perhap driver pay should, to some degree, be based on performance. Perhaps a reasonable retainer that is equal for all drivers, and then "prize" money based on outcomes.

Comments

[sportsman]

Needless to say I agree with idea in principle.
The biggest stumbling block is establishing he base level retainer.
Obviously a newcomer cannot expect the same retainer as the existing WDC or established drivers.
But there should be performance related clauses,and bonuses per point.
I find it ridiculous that enormous salaries are paid irrespective of performance.
It would never happen in the real commercial world.Good salaries and benefits,true.But good bonuses for on target results are the main incentive.

[Paul Murtagh]

This system has already been proven to be successful in the past in F1. Back in 2005 David Coulthard received a small retainer to get his seat at Red Bull, and was given the chance to build up his wags with a points bonus. He scored 34 points that season and the points bonus nearly triped his basic pay

If Red Bull could make it work with an established driver such as David Coulthard, then surely most of the teams can make it work with their drivers. Perhaps the retainer could be staggered due to the finishing order in the championmship - the champion gets the highest retainer and so on. It could be more of an incentive to perform well on track, and could make the racing that bit more interesting if drivers had to battle in order to improve their wages the following season.