The Power of Unconventional Contracts

Shohei Otani's contract with the Los Angeles Dodgers offers a glimpse into how unconventional compensation structures can be beneficial for both employees and employers. With an overall value of $700 million, only a small fraction is allocated as annual salary, with most of the payout deferred to years after he retires. This arrangement reflects a focus on long-term gains rather than immediate cash, allowing the team to manage its budget more flexibly while providing stability for the player later in life. Such creative negotiations demonstrate the potential for higher earning stability, motivated by mutual benefit in the employer-employee relationship.