Contingent Compensation
Payment owed to talent based on a project achieving specific performance milestones.
Definition
Contingent compensation is money owed based on measurable outcomes rather than guaranteed upfront. This includes box office bonuses, streaming viewership thresholds, award nominations, and syndication triggers.
Unlike vague profit participation, contingent compensation ties to specific, verifiable events that trigger defined payments.
Why It Matters
Well-structured contingent compensation aligns talent and studio interests, rewarding success beyond initial projections.
Clear triggers and definitions prevent disputes about whether milestones were actually achieved.
Examples in Practice
A director's contract includes a $500,000 bonus if domestic box office exceeds $100 million.
An actor earns an additional $1 million when their streaming film is watched by 50 million households in its first month.
A writer receives contingent payments if the series runs beyond three seasons, incentivizing long-term story planning.