Well, realistically it both is and isn't. If you detach completely it's obviously ludicrous, but comparatively it's not that crazy. It just hasn't worked out the way we hoped.
If we look at the other defenders that season where he renewed you've got AWB on 90k, Lindelof on 120k, Shaw on 150k and Maguire on 190k.
https://www.redcafe.net/players/2019-20/all - The Caf (as a whole) gave him a 6.0 that season when he had his renewal, which puts him at or above the players mentioned so he clearly had a decent season leading up to it.
I know in the past contracts that raised your wage based on appearances were used a lot, and it probably would have made a lot of sense with this guy, but I'm not that sure they are all that common anymore.