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This excerpt taken from the SIRI DEF 14A filed Apr 30, 2009. Related
Policies and Considerations
Compensation
of our Chief Executive Officer
In November 2004, our board of directors negotiated, and we
entered into, a five-year employment agreement with Mel Karmazin
to serve as our Chief Executive Officer. The material terms of
Mr. Karmazin’s employment agreement are described
below under “Potential Payments Upon Termination and
Change-in-Control —
Employment Agreements — Mel Karmazin.”
The terms of Mr. Karmazin’s employment were
established by negotiations between Mr. Karmazin and
members of our board of directors, including members of the
Compensation Committee. The board of directors and the
Compensation Committee did not retain an independent
compensation consultant specifically to advise them in the
negotiation of Mr. Karmazin’s compensation
arrangements or to assess the reasonableness of the compensation
arrangements. Our board of directors and the Compensation
Committee concluded that, in their business judgment,
Mr. Karmazin’s profile, qualifications and experience,
particularly in radio, were uniquely suited for our needs, and
that the compensation, including the base salary, stock option
and restricted stock components of the compensation, was, taken
as a whole, reasonable and appropriate under the circumstances.
Most of the difference in total compensation between
Mr. Karmazin and our other named executive officers is
attributable to the value reflected in the Summary Compensation
Table for “Option Awards.” As reflected in the
Outstanding Equity Awards at Fiscal Year-End 2008 table on
page 25, and described in footnote (1) to that table,
Mr. Karmazin received a stock option award covering a
substantial number of shares (as well as shares of restricted
stock reflected in the Outstanding Equity Awards at Fiscal
Year-End 2008 table and the Options Exercised and Stock Vested
for 2008 table) in connection with the execution of his
employment agreement in November 2004. Mr. Karmazin did not
receive any equity-based awards in 2006, 2007 or 2008. The total
compensation in the Summary Compensation Table reflects the
inclusion, as noted in footnote (3) to the table, of the
expense recognized solely for financial statement reporting
purposes in 2006, 2007 and 2008 for option awards.
Policy
with Respect to Internal Revenue Code
Section 162(m)
Section 162(m) of the Internal Revenue Code places a
$1 million per person limitation on the tax deduction we
may take for compensation paid to our Chief Executive Officer
and our three other highest paid executive officers other than
our Chief Executive Officer and Chief Financial Officer except
that compensation constituting performance-based compensation,
as defined by the Internal Revenue Code, is not subject to the
$1 million limit. The Compensation Committee reserves the
discretion to pay compensation that does not qualify for
exemption under Section 162(m) where the Compensation
Committee believes such action to be in the best interests of
our stockholders.
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