New York Islanders How Performance Bonuses Work for ELC Contracts

How do performance bonuses work for ELC contracts? New York Islanders 2019 first-round Simon Holmstrom didn’t get some on his ELC. What should we know about performance bonuses?

With his new entry-level contract, New York Islanders first-round pick in 2019 Simon Holmstrom took the first major step in his NHL career. In looking at the deal in more detail I brought up that he didn’t get any performance bonuses.

It’s not something all rookies get on their ELC, but many first-round picks get performance bonuses.

Both the Islanders first-round picks from 2018, Oliver Wahlstrom and Noah Dobson have performance bonuses. The Isles first-round pick from 2016 Kieffer Bellows also has performance bonuses in his contract with the Islanders.

What are performance bonuses exactly?

Two Types

There’s no definition necessarily, but performance bonuses are exactly what they sound like. Financial rewards for achieving a pre-determined goal.

Performance bonuses are only allowed in three cases in accordance with the NHL’s CBA. Article 50.2 (C) 2 states the following on who can receive a performance bonus:

"Performance Bonuses shall be allowable under this Agreement only for: (i) Players with Entry Level SPCs under Article 9 of this Agreement; (ii) Players aged 35 or older as of June 30 prior to the League Year in which the SPC is to be effective, who have signed a one-year SPC for that League Year; and (iii) Players who are “400-plus game Players” for pension purposes, and who: (i) in the last year of their most recent SPC, spent 100 days or more on the Injured Reserve List; and (ii) have signed a one-year SPC for the current or upcoming League Year."

That’s why when you look at the New York Islanders Cap Friendly page, and sort by performance bonus, only one player on the NHL roster has performance bonuses, and it’s Mathew Barzal. He’s the only one still on his ELC.

Great. That establishes who can get a performance bonus. Now, what can a player get a performance bonus for exactly?

Exhibit 5 of the NHL’s CBA (page 326) is quite clear on what can and cannot be covered in a performance bonus. Performance bonuses fall into two levels; A and B.

“A” Level

“A” level performance bonuses are paid by the team (not the league) and an ELC can contain any number of individual “A” level performance bonuses. Each individual “A” level bonus can pay out a maximum of $212,500 and combine for a maximum of $850,000. So four maxed out “A” level performance bonuses.

*This bonus can be split into two categories: aggregate TOI and per-game TOI. Each can carry a max of $212,500 but cannot exceed $212,500 together.
**This bonus cannot be negotiated for less. For example, a team and a forward can’t set this “A” level bonus for goals at 15.
***This bonus is for all goalies that played a minimum of 25 games.

“B” Level

Any player on an ELC is eligible for a “B” level bonus. These are paid by the league. That means Simon Holmstrom could receive performance bonuses. Some “B” level bonuses (winning the Hart, Richard, Vezina, Jennings, Norris, Conn Smythe, or Selke) can be negotiated with the team.

Level “B” bonuses are paid based on the CBA. It sets out how much can be paid per bonus. A “B” level bonus is paid for one of the following:

• Winning a select trophy or award: Hart, Norris, Vezina, Selke, Richard, Lady Byng, Jennings, or Calder
• Named to the first or second All-Star Team (end of season All-Star team)
• Forwards: top 10 in goals, assists, points, points per game for forwards
• Defensemen: top 10 in goals, assists, points, points per game for defensemen
• Goalies: top five in GAA (25 game min.), SV% (25 game min.), wins (30 game min.)

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If you want to read more about performance bonuses, head to the NHL’s collective bargaining agreement with the players. You’ll find most of the information in Exhibit 5 on page 326 of the CBA.