How does Paizo - or any tabletop publishing company for that matter - determine what they pay their artists? Does a formula exist like x number of pictures equals y dollars? Or is it a flat rate per project they work on?
You work with the artist or make an offer to them. Artists will normally have their own rates which are based on the size of the of the piece of art being commissioned (usual sizes are quarter-page, half-page, third-page and full page) and on whether the piece will be in black and white or color.
In the end, however, it's finding an artist you can afford. The formulas DO exist but they're usually made by the artist. If they're made by the company, then the artist will take it or leave it.
For more, and more varied information, you might want to visit the "Game Freelancing" forum at rpg.net.
Thanks for the link.