Sirius CEO's Salary, Bonus Up, Liberty Adds 2 To Sirius Board

Sirius XM Radio Inc. (SIRI) Chief Executive Mel Karmazin received total compensation for 2010 worth about $9.9 million, down roughly three-quarters from his 2009 compensation, which included $35.2 million in stock option awards.

Karmazin's compensation for 2010, disclosed in a filing with the Securities and Exchange Commission on Tuesday, included a higher salary and bonus than the year before. His salary rose to $1.5 million from $1.25 million, while his bonus increased to $8.4 million from $7 million.

Sirius also said in the proxy filing that Karmazin will receive payments and benefits valued at between $108 million to $119.8 million in the event of a change of control of the company or Karmazin's termination under certain circumstances. That amount is mainly comprised of the $108 million value at December 31, 2010, of options and restricted stock that would vest immediately upon change of control or certain employment-termination scenarios.

In the proxy, Sirius highlighted the new deal it struck late last year to keep popular and controversial broadcaster Howard Stern on its airwaves for another five years, saying it was among several "achievements and other measures that contributed to [its] continued growth and success." Many credit Stern and his legions of fans for giving Sirius a viable business model and ultimately leading to Sirius merging with the once much larger XM nearly three years ago, and Karmazin didn't join Sirius as CEO until after the company announced it had lured Stern away from his top-rated morning show on terrestrial radio.

Last month, Stern sued Sirius, claiming he and his agent were denied multiple stock bonuses under his employment agreement, based on subscriber targets Stern claims were well exceeded, thanks in no small part to him. The suit didn't specify damages, but judging by awards he received shortly after joining the company in 2006, the bonuses he claims he is owed appear to be well into the tens of millions, if not in the hundreds of millions, of shares.

Representatives of Stern couldn't immediately be reached and a Sirius spokesman didn't immediately respond to an email request for comment.

Also Tuesday, Sirius said Liberty Media Corp. (LCAPA, LINTA, LSTZA) exercised an option to appoint two new members to the board of Sirius XM, according to a separate filing with the Securities and Exchange Commission.

Liberty appointed Vanessa Wittman, chief financial officer with Marsh & McLennan Cos. (MMC), and Carl Vogel, former president of Dish Network Corp. (DISH), as independent directors on Sirius XM's board.

Those two join John Malone, Liberty's chairman and controlling shareholder, on Sirius XM's board, along with Liberty's chief executive, Greg Maffei, and its chief financial officer, David Flowers. The number of seats on the board was increased by two to 13.

Sirius XM disclosed that Liberty has the right to appoint and elect a number of members to the satellite radio company's board of directors in proportion with its ownership levels. At the end of 2010, Liberty owned $337 million worth of Sirius XM's public debt, as well as preferred stock in Sirius XM that is convertible into common stock representing about 40% of its outstanding equity.

Liberty gained its Sirius XM stake by lending money to the company in 2009 when it was on the brink of bankruptcy. The investment has since paid off handsomely for Liberty, and the media company's executives have been optimistic about the prospects for satellite radio.

-By Nat Worden, Dow Jones Newswires; 212-416-2472; nat.worden@dowjones.com

Liberty Media Corp. - Liberty Starz Class B Common Stock (MM) (NASDAQ:LSTZB)
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