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This excerpt taken from the SIRI DEF 14A filed Nov 4, 2008. Annual
Bonus for Named Executive Officers
Purpose. Our compensation program provides for
an annual bonus that is discretionary. Although our annual bonus
compensation element is discretionary, the Compensation
Committee attempts to award bonuses that incentivize individuals
to achieve goals that are intended to correlate closely with
growth of our business and stockholder value and to compensate
individuals upon the achievement of such goals.
Considerations. Although our annual bonus
awards are discretionary, during the past three years the
Compensation Committee generally employed the three step process
described below to assist it in shaping its decision and assist
in evaluating appropriate bonuses for our named executive
officers. The Compensation Committee may not employ the same
process, or may adopt a modified or wholly different process in
the future, in making bonus decisions.
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In 2008, the Compensation Committee intends to determine the
overall bonus funding by evaluating the company’s
performance against its 2008 business plan as approved by board
of directors, including metrics such as total subscribers, cash,
revenues, EBITDA, SAC per gross addition, churn, operating
expense growth, and other factors that it determines are
appropriate.
The Compensation Committee has discretion as to whether annual
bonuses for our named executive officers will be paid in cash,
restricted stock units or a combination thereof. In general, our
practice is to pay these bonuses 50% in cash and 50% in
restricted stock units. Any restricted stock units that are
awarded are granted under a long-term incentive plan approved by
our stockholders. The Compensation Committee also retains
discretion, in appropriate circumstances, to grant a higher or
lower bonus or no bonus at all.
Year 2007 Decisions. In 2007, the Compensation
Committee approved bonuses that were intended to achieve two
principal objectives:
At the end of the year, the Compensation Committee reviewed the
company’s performance, additional accomplishments and other
factors it deemed relevant, and approved a bonus pool for
employees.
The annual bonus for Mr. Karmazin is discussed below under
“Compensation of our Chief Executive Officer.”
Mr. Greenstein was awarded a bonus for his contributions
during the year, including his role in the continued enhancement
of our programming and the marketing efforts which supported our
brand awareness and customer satisfaction levels, and the
addition of net new subscribers.
Mr. Meyer was a awarded a bonus for his contributions
during the year, including his role in the company being cash
flow positive in the second half of 2007, adding net new
subscribers in 2007, containing operating expense growth,
launching SIRIUS Backseat TV, improving our segment share,
improving self-pay churn levels and customer save rates,
controlling subscriber acquisition costs per gross addition,
improving automaker penetration and negotiating extensions of
our agreements with various automakers.
Mr. Donnelly was awarded a bonus for his contributions
during the year, including his regular on-going contributions as
our general counsel, and his role in our Copyright Royalty Board
proceeding, raising additional funding on favorable terms, the
negotiation, execution and pursuit of approval of our pending
merger with XM Radio and negotiating extensions of our
agreements with various automakers.
Mr. Frear was awarded a bonus for his contributions during
the year, including his regular on-going contributions as our
chief financial officer, and his role in the company being cash
flow positive in the second
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half of 2007, improvements in our subscriber acquisition costs
per gross addition, containing operating expense growth, our
Copyright Royalty Board proceeding, the negotiation, execution
and pursuit of approval of our pending merger with XM Radio, and
raising additional funding on favorable terms.
Based on the foregoing, the Compensation Committee approved the
bonus amounts set forth in the Summary Compensation Table.
This excerpt taken from the SIRI DEF 14A filed Apr 23, 2007. Annual
Bonus for Named Executive Officers
Purpose. Our compensation program provides for
an annual bonus determined based upon performance. The objective
of this program is to incentivize individuals to achieve
specific goals that are intended to correlate closely with
growth of stockholder value and to compensate individuals upon
the achievement of such goals.
Considerations. The annual bonus process for
named executive officers typically involves three basic steps.
Under the bonus plan, the Compensation Committee has discretion
as to whether annual bonuses for our named executive officers
will be paid in cash, restricted stock units or a combination
thereof. In general, our current practice is to pay bonuses 50%
in cash and 50% in restricted stock units. Any restricted stock
units that are awarded are granted under a long term incentive
plan approved by our stockholders. The Compensation Committee
also retains discretion, in appropriate circumstances, to grant
a higher bonus, lower bonus or no bonus at all.
Year 2006 Decisions. At the beginning of 2006,
the Compensation Committee established performance goals for
2006 bonuses based on: (1) end of period subscribers, and
(2) cash flow from operations with capital expenditures.
For 2006, the Compensation Committee gave equal weight to each
of these measures.
In setting these measures and determining the extent to which
they were satisfied, the Compensation Committee excluded the
impact of items (such as long term capital expenditures not
anticipated in the original plan and subsequently approved by
the board of directors) that it believed were not driven by the
current performance of executives or that, in the Compensation
Committee’s judgment, otherwise had a distorting positive
or negative impact relative to the performance of executives and
the established performance goals.
After the end of the year, the Compensation Committee determined
that the weighted performance for these metrics exceeded the
goals set at the beginning of the year.
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In approving the individual awards for Messrs. Karmazin,
Greenstein, Meyer, Donnelly and Frear, the Compensation
Committee also took into account the following 2006
accomplishments:
As a result of these determinations, the Compensation Committee
approved the bonus amounts set forth in the Summary Compensation
Table.
Long-term Incentive Compensation
Purpose. Our long-term incentive program provides a
periodic award (typically annual) that is performance based. The
objective of the program is to align compensation for named
executive officers over a multi-year period directly with the
interests of our stockholders by motivating and rewarding
actions that create or increase long-term stockholder value. The
level of long-term incentive compensation is determined based on
an evaluation of competitive factors in conjunction with total
compensation provided to named executive officers and the goals
of the compensation program described above.
Mix of Restricted Stock Units and Stock
Options. Our long-term incentive compensation
generally takes the form of stock options and restricted stock
units. The two forms of awards reward stockholder value creation
in different ways. Stock options (which have exercise prices
equal to the market price at the date of grant) reward named
executive officers only if the stock price increases. Restricted
stock units are affected by all stock price changes, so the
value to named executive officers is affected by both increases
and decreases in stock price.
In the case of normal annual grants, 100% of the total value of
a long-term compensation award typically takes the form of stock
options. In the case of new hire grants or contract renewals,
some portion of the total value may also be in the form of
restricted stock units.
Stock Options. Our long-term incentive program
calls for stock options to be granted with exercise prices of
not less than fair market value of our stock on the date of
grant and to vest proportionally over four years, if the
employee is still employed by us, with rare exceptions made by
the Compensation Committee. We define fair market value as the
stock price on the close of business on the day of grant for
existing employees and close of business the day before hire for
new hires. The Compensation Committee does not expect to grant
stock options with exercise prices below the market price of our
common stock on the date of grant. New option grants to named
executive officers normally have a term of ten years.
Vesting of Restricted Stock Units. Restricted
stock units granted as long-term incentive compensation to named
executive officers generally either (1) vest
proportionately on each anniversary of the grant for the first
four or five years if the employee is still employed by us, or
(2) vest on the fifth anniversary if the employee is still
employed by us, with accelerated vesting proportionately over
the first four years based on achievement of specific
performance criteria. These performance-based requirements and
vesting schedules do not relate to restricted stock units
granted in lieu of cash under our annual bonus program because
these bonus awards are already granted based on performance
under the annual bonus program. Restricted stock units granted
under the annual bonus program vest approximately one year after
the grant date.
Stock Ownership and Holding Policy. We do not
require specific ownership or holding requirements for named
executive officers.
Year 2006 Decisions. In 2006, the long-term
compensation awarded by the Compensation Committee to named
executive officers under the programs described above is
identified in the Grants of Plan-Based Awards Table for 2006.
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Periodic Review. The Compensation Committee
intends to review both the annual bonus program and long-term
incentive program annually to ensure that their key elements
continue to meet the objectives described above. In determining
the annual grants of restricted stock units and options, the
Compensation Committee considered any contractual requirements,
market data on total compensation packages and, except in the
case of the Chief Executive Officer, the recommendations of the
Chief Executive Officer.
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