In addition to the upfront fee, United must pay £30,000 after 15, 30, 45, 60 and 75 appearances for the Iron.
There is also a 20 per cent sell-on clause, with a further £250,000 if the Iron win promotion to the Premier League within two years.
"Given that Martin had very limited Championship experience prior to joining United, the award is considerably more than we anticipated," said an SUFC statement.
"We have been promised a full explanation for the award, and until that is received we are unable to comment further."
The Northern Ireland forward joined Scunthorpe from the Potters in the summer when his contract expired, but the two clubs were not able to agree a fee - as the player is under 24 Stoke were entitled to cash.
Stoke were demanding £750,000 plus clauses which would have added to a total of £1.25million.
Scunthorpe had offered £125,000 plus a 15 per cent sell on clause.