The DirecTV Group (DTV)

Compensation of Chief Executive Officer

        Mr. Carey's compensation target for bonuses and the long-term stock incentive award are reflected in an employment agreement effective January 1, 2004 that is summarized in "Employment Agreement with the Chief Executive Officer of the Company" on page 39 and "Potential Payments upon Termination or Change in Control" beginning on page 47. Under the employment agreement, changes in the Consumer Price Index or CPI for the New York City area determine Mr. Carey's base salary increases. The Committee approved the Company's calculation of the salary increase for 2006.

        To determine the amount of the CEO's 2006 annual performance-based bonus, the Committee evaluated the Company's and the CEO's performance. In its evaluation of the CEO's performance, the Committee also considered various financial and operational performance factors and the CEO's overall leadership of executives and employees. Some of these factors and accomplishments considered include:

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Improvement in the level of churn, although it is an area of continued concern for the future,



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Increased average revenue per subscriber with reduced subscriber acquisition costs,



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Pre-SAC margin improvement and growth in revenue and net income,

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Increased growth of quality subscribers, particularly through direct sales and relationships with telephone companies, however, the overall target in new subscribers was missed,



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Quality of programming and packaging,



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Cost of content,



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Management of upgrade and retention costs,



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Customer service continuing as an area needing improvement,



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Implementation of the set-top box leasing program,



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Completion of the restructuring of DTVLA ownership in Brazil and Mexico,



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Opening an additional owned call center,



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Launching a new DVR and rollout of additional high definition local-into-local channels,



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Launching a new satellite, and



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New content such as Project MyWorld, Championship Gaming, new NFL Interactive, NASCAR sponsorship and new international programming channels.

        Based on consideration of all of these factors and others, the Committee determined that the CEO's bonus would be somewhat greater than the target bonus in the CEO's employment agreement, but less than the maximum funded in the Bonus Plan.

        In 2004, the Committee approved Mr. Carey's stock award as part of his employment agreement and four-year stock performance plan. The Committee does not currently anticipate any additional stock-based awards for Mr. Carey during the term of the employment agreement. The Committee will evaluate the Company's performance at the end of 2007 to determine the disposition of Mr. Carey's performance-based stock award.

Compensation of Chief Executive Officer

        Mr. Carey's compensation package was established in 2004 and is reflected in an employment agreement effective January 1, 2004. That agreement is summarized in this proxy statement.

        To determine the amount of the CEO's 2005 annual performance-based bonus, the Compensation Committee evaluated the Company's and the CEO's performance. The Compensation Committee determined that the Company substantially achieved the Net Subscriber Growth target for 2005, which slightly reduced the maximum award amount payable under the Bonus Plan. In its evaluation of the CEO's performance, the Compensation Committee also considered various financial and operational

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performance factors and the CEO's overall leadership of executives and employees. Some of these factors and accomplishments considered include:

•

Level of churn, average revenue per subscriber and subscriber acquisition costs



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Margin improvement and growth in revenue and net income



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Management of upgrade and retention marketing costs



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Implementation of a stricter credit policy for new subscribers



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Improvements in customer service



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Launch of a new DVR and MPEG-4 receiver, and rollout of high definition channels in selected markets



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Launch of three new satellites (two for high definition local channels)



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Creation of a new Entertainment division and development of new content



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Completion of the sale of HNS, LLC



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Completion of the migration of DTVLA Mexico customers to Sky Mexico and termination of the operations of DTVLA Mexico

        Based on consideration of all of these factors and others, the Compensation Committee determined that the CEO's bonus would be 95% of the target bonus in the CEO's employment agreement.

Compensation of Chief Executive Officer

Effective December 22, 2003, Chase Carey was elected President and Chief Executive Officer, replacing Jack Shaw. For the balance of 2003, Mr. Carey received no compensation. The Board established Mr. Carey’s compensation package for 2004, which is reflected in an employment agreement with Mr. Carey effective January 1, 2004. That agreement is summarized in the Company’s proxy statement.

To determine the amount of the CEO’s 2004 annual performance-based bonus, the Compensation Committee evaluated the Company’s performance and the CEO’s performance as a participant in the Bonus Plan. The Compensation Committee determined that the Company achieved the Net Subscriber Growth target for 2004 which, as with the other officers, permitted payment of the maximum award amount under the Bonus Plan. In its evaluation of the CEO’s performance, the Compensation Committee also considered various financial and operational performance factors of the Company. The Compensation Committee considered the Company’s performance in areas such as churn, ARPU growth, SAC, margin improvement, and other factors and determined that overall financial and operational performance had been positive. The Compensation Committee also evaluated the CEO’s overall leadership of executives and employees, particularly in the context of a transitional year for DIRECTV. During that time, the CEO focused the Company’s energies on its core direct-to-home business. The Company sold its stakes in PanAmSat, Hughes Software Systems and XM Satellite Radio and developed a new ownership arrangement for Hughes Network Systems. DIRECTV Latin America emerged from bankruptcy and entered into a series of transactions designed to consolidate its platforms with those of Sky Latin America in each of the major territories in Latin America. The lawsuits with NRTC and Pegasus were resolved and their subscribers and distribution rights were acquired by DIRECTV. A new executive team was recruited and transitioned into the business. Based on consideration of all of these factors, the Compensation Committee determined that the CEO’s bonus would be above the target bonus in the CEO’s employment agreement although less than the maximum amount permitted by the Bonus Plan.