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This excerpt taken from the SIRI DEF 14A filed Apr 30, 2009. Long-term
Incentive Compensation
The Compensation Committee grants long-term incentive
compensation 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 Compensation Committee
determines the level of long-term incentive compensation based
on an evaluation of competitive factors in conjunction with
total compensation provided to named executive officers and the
objectives of the compensation program described above.
Our Compensation Committee grants long-term incentive
compensation in the form of stock options and restricted stock
units because our Compensation Committee believes that these two
forms of awards reward stockholder value creation in different
ways. Stock options (which have exercise prices equal to the
market price on the date of grant) reward named executive
officers only if our stock price increases. Restricted stock
units have value on the date of grant. 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 our stock price.
Our long-term incentive program calls for stock options to be
granted with exercise prices of not less than fair market value
of our common stock on the date of grant and, historically, to
vest proportionally over four years, if the employee is still
employed by us, with exceptions to this vesting schedule 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 on the close of business the day before
hiring for new employees.
The long-term compensation awarded by the Compensation Committee
to named executive officers in 2008 under the programs described
above is identified in the Grants of Plan-Based Awards in 2008
table. The long-term compensation awarded to
Messrs. Greenstein, Meyer and Frear was intended by the
Compensation Committee to have a value equal to the 2007 bonus
awarded to each of the executives. The executives were awarded
these long-term incentives in recognition of their contributions
in 2007 and as an incentive for the executives to continue to
enhance stockholder value. Mr. Donnelly did not receive a
long-term incentive award because he received an award as part
of the negotiation of an extended employment agreement in 2007.
Table of Contents
Ms. Altman became an executive officer in September 2008,
following our merger with XM, and did not receive a long-term
incentive award from us during 2008.
As a result of the decline in the price of our common stock,
none of our executive officers hold any stock options that are
“in-the-money.” The Compensation Committee will
consider the impact of the decline in the price of our common
stock on the value of prior long-term equity-based compensation
grants, when making decisions with respect to appropriate grant
levels for 2009.
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