The Giants acquired Pence from the Philadelphia Phillies last summer in exchange for a package of minor leaguers, including Seth Rosin and Tommy Joseph, and outfielder Nate Schierholtz. The outfielder earned $10.4 million in 2012.
Between the Phillies and Giants last season, Pence hit .253/.319/.425 with 26 doubles, four triples and 24 home runs over 617 at-bats. The 29-year-old has hit .285/.339/.475 over six seasons at the major league level.
Beyond Pence, the Giants have avoided arbitration with two other players. San Francisco signed Jose Mijares to a one-year, $1.8 million contract, while they extended Santiago Casilla for three years and $15 million.
San Francisco now has five arbitration-eligible players remaining, including Buster Posey, Clay Hensley, Gregor Blanco, Joaquin Arias and Sergio Romo.