F1 Drivers Pay

Anyone have any idea how some of the top F1 contracts are structured? I'm just curious how much is incentive based, how much is base and how are they paid, etc.? Is it by the race, annual salary, signing bonus, etc. One other thing I wondered since it is such an international sport, in which currency are they paid? Is it by the home of the race team or where the driver lives? As an example, if you are paid in the English Pound, it is worth quite a bit more than if you were paid in the American Dollar with the exchange rate. Just wondering if anyone has any insight.

Thanks!

 

+1, interesting questions. I'm sure someone on here could answer all of them.

 

What currency they are paid in wouldn't really matter - for example if McLaren pays Alonso in Euro (which I imagine they are mostly paid in), then they would just deposit enough Pounds Sterling to cover it. If he is paid in Pounds, then he would just have it converted when he deposits it in his bank. At that level of pay, you could get great deals on the currency conversion, and most of that would be handled during negotiations anyway. The base/incentive thing depends on the team. Usually they are just paid a given amount per season. I imagine it would be paid weekly or monthly. The contracts are generally written by the calendar year, so a one-year contract for $12mm would be $1mm a month, not $12mm divided by the number of races. Thats why for example Kimi could not go to Ferrari early, as Ron kept his option to keep Kimi until December 31st before releasing him to Ferrari.

 

most live in Monaco so that they pay no taxes

 

In Schumacher's last season or two, he was making approximately $80 million per year. http://www.forbes.com/2004/06/23/04athletesland.html

I can't seem to find the article to back it up, but I recently read that when Kimi signed with Ferrari, his contract is worth approx. $53 million per year.

In short, the top F1 drivers are some of the highest paid athletes in the world.