A Breakdown Of Golf's Richest Week
The FedEx Cup bonus pool is worth $100 million this year.
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Hey Golfers —
Tens of millions of dollars are at stake this week at the Tour Championship in Georgia — $100 million, to be exact. But the prize money may not be paid out the way you think it is.
And bonuses aren’t included in a PGA Tour player’s earnings. So if you ever end up on the PGA Tour career earnings page — you’ll notice they do not include FedEx Cup bonuses — or other bonuses for that matter.
Here’s a brief history of the FedEx Cup bonus.
Announced in 2005 — the inaugural FedEx Cup bonus was in 2007.
Tiger Woods won the $10 million 2007 FedEx Cup bonus. But he couldn’t touch the cash. It was treated as deferred compensation.
The deferred compensation model has since changed. A majority of the money a player earns this week is paid after the tournament, but a small amount of deferred compensation still exists.
Top PGA Tour players earn millions in bonuses. Rory McIlroy alone has won $54.4 million alone from the FedEx Cup bonus. That would rank him 17th on the PGA Tour career earnings list.
Just to give you an overall idea of how impactful bonuses have become on the PGA Tour — here is a look at Viktor Hovland’s 2023 season after he won the FedEx Cup bonus.
Viktor Hovland won more than $38 million last year in on-course earnings. Only 36.7% came from tournaments. The remainder of his earnings was from bonuses.
The winner of this year’s FedEx Cup bonus will win $25 million — an enormous amount of money. Just a few key points of context on that amount of money.
It would rank 84th on the PGA Tour career money list. Tommy Fleetwood has made $24.9 million.
It would rank 15th on the DP World Tour career money list.
It would rank one on the LPGA Tour career money list.
The first-place price of the FedEx Cup bonus has increased significantly since 2021, when it was $15 million. It jumped to $18 million in 2022 and is now $25 million.
Here is an overview of how the bonuses are paid out.
I will note that we have searched but can not find the details for the 2024 FedEx Cup bonuses. They will likely come out after the tournament this week.
But here is a look at how 2023 payouts were distributed.
Viktor Hovland’s $18 million included $17 million in cash and $1 million in deferred compensation. The top five players each received $1 million in deferred compensation in their payouts.
Tenth place in last year’s payout earned a total of $1 million. Half of that was in cash, and half was in deferred compensation.
The 30th-place bonus in the 2023 FedEx Cup was $500,000. $245,000 of that was paid in cash, and $265,000 was paid in deferred compensation.
But it isn’t just the golfers that made it to the Tour Championship that are getting paid. Golfers who finished 31st — 150th on the FedEx Cup points list will earn deferred compensation payouts. The bonuses ranged from $250,000 at 31st to $85,000 at 150th in 2023.
Let’s take Harry Higgs, for example. He finished 144th on last year’s money list earning $684,000. He also will receive $85,000 in deferred compensation.
So, what is deferred compensation?
That money goes into a golfer’s non-qualified deferred retirement plan. Golfers have two ways to earn money for their retirement plans.
Cuts Plan
FedEx Cup Bonus Plan
The FedEx Cup bonus plan immediately vests for a golfer. Whereas the Cuts Plan takes five years to fully vest. And to have a year that counts in the Cuts Plan — a golfer must play in 15 PGA Tour events.
Golfers can begin taking money from their FedEx Cup bonus plan when they turn 45. The deferred compensation has a massive compounding effect.
The PGA Tour is believed to do an exceptional job investing golfers’ money. If we took Viktor Hovland’s $1 million in deferred compensation from 2023 and assumed an annual 8% return, it would be worth around $4.5 million when he is 45 years old.
The PGA Tour lists $2.25 billion on its Form 990 under Investments—publicly traded securities on its balance sheet. Around 75% of that money is in play retirement.
And as of December 31st, 2021 — over 100 golfers had over $5 million in their retirement accounts. That number has surely increased in the last two and a half years.
The amount of money golfers are competing for this week is historic. While it’s understandably been a tired conversation over the last couple of years, it will be a life-changing week for many golfers in the field from a financial standpoint.
Have a great Monday. We will talk to you next week!
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Great piece, Jared. It's staggering the amount of money (not just golfers) professional athletes are making these days.