If I were a member of management, and I found out that he was doing this, I would be furious. Not because he gamed the system and received the bonuses, but because he didn't share his innovation with the rest of the team and improve everyones' efficiency. If he had done that, I would recognize his talent and initiative and promote him, allowing him to do more rewarding, higher-level work.
He probably rightly senses that his boss wouldn't feel the way you hope you would. In fact I don't think most people would offer him a rational incentive at all. If he saves the company $1 million a year are you actually going to cut him a $200k+ bonus? I'd be very doubtful of anyone who says they would. Most people would give him $20k if they're especially generous and a pat on the head.
It would be very interesting to analyze if indeed higher monetary incentives do rise the level of innovation within a company.