Look at what's going on in Dallas ISD with their TEI. The problem with merit pay is that it overall benefits those who teach in privileged areas, which tend to be overwhelmingly wealthier and whiter.
Just like anything else in education, you can only do what you can document and justify. Test scores are easy to document, so that's primarily what TEI and other merit-pay systems are based on. Test scores consistently track with parental income level. Translating that to the band world, look at competitions like SMC and Honor Band. Yes, there are outliers, but consistently the schools that do well in those competitions are those with higher income level. Look at UIL scores for both concert and marching. How often do you see the wealthy suburban schools get any less than a I? How often do you see inner-city schools scoring III and IV, or just not attending at all? I have friends in both situations, and I can tell you it's not at all fair to compare their programs (or their teaching ability) based on UIL scores. Many inner-city directors work harder for that III than any Honor Band director works for their Sweepstakes.
Unless you have a better idea for structuring a merit-pay system, the overall result will be more teachers who want to teach in the wealthy suburbs, and even fewer willing to teach in the urban areas (or even the slightly-less-wealthy suburbs).
My take, from my previous life in the corporate world:
Nobody gets a significant raise from excelling at their job and staying in the same position. Excelling at your position gets you noticed, which then allows you to seek a promotion or move to a different company, which should come with a raise. In education, "teacher" is pretty far DOWN the ladder. Even if you're a head band director at a big school, you're only a few rungs off the ground (teacher position plus stipend). If you want more money, look for a promotion. We're lucky among teachers because we can get a raise for moving from assistant to head, or from MS to HS. Maybe you can get a stipend (aka a raise) for being a department head or something like that. Look at moving into administration or central office. Look for other districts that pay better. A corporate office drone who never seeks a promotion and greater responsibility will never see much of a raise, and a teacher who always stays a teacher will only get their annual step on the pay chart.