[1] They are often given as a way of making a compensation package more attractive to the employee (e.g., if the annual salary is lower than they desire).
It can also lower risk to the employer compared with a higher salary; for example, if the employee does not meet expectations.
In sports contracts, the full amount of signing bonuses is not always paid immediately, but spread out over time.
As of March 2019, Aaron Rodgers had received the highest signing bonus in National Football League history, at $57.5 million.
[2] As of July 2023, Paul Skenes had received the largest signing bonus in Major League Baseball draft history, at $9.2 million.